As President Obama and his economic advisers desperately try to figure out how to get millions of unemployed Americans back to work, the relationship between job creation and urban density hasn’t exactly been on the radar. But maybe it should be, according to a recent New York Times opinion article written by Economist staff writer Ryan Avent.
Avent argues that those who often fight for urban preservation (and the concurrent restraint of development) are hobbling the ability of cities to grow at their full potential and create more jobs.
Economists studying cities routinely find that after controlling for other variables, workers in denser places earn higher wages and are more productive. Some studies suggest that doubling density raises productivity by around 6 percent while others peg the impact at up to 28 percent. … Put two workers with similar skill levels in cities of different densities and the one in the denser place will be more productive, according to two decades’ worth of research from economists.
While Avent makes an important addition to the public discourse on urban policy, his ideas are not fundamentally new. Jane Jacobs came out against dispersing people and celebrated tight-knit city neighborhoods in her classic book The Death & Life of Great American Cities. More recently, urban theorist Richard Florida has brought renewed attention to the issue with his book The Rise of the Creative Class.
But Avent doesn’t say that making cities more packed with people is a cure-all for the economy and some cities are better able to take advantage of the benefits of being more crowded.
Density isn’t a magic elixir. One can’t create wealth just by crowding people together; otherwise the super-dense metropolitan areas in emerging Asian countries would be richer than American cities. Density simply facilitates interaction. Interactions translate into wealth when a population is educated and local institutions support private enterprise and entrepreneurship.
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