Abstract and Keywords
This chapter explores the economic forces that led the United States to become an urban nation. The urban wage premium in the United States was remarkably stable over the past two centuries, ranging between 15 and 40 percent. The wage premium rose through the mid-nineteenth century as new manufacturing technologies enhanced urban productivity, then fell from 1880 to 1940 (especially through 1915) as investments in public health infrastructure improved the urban quality of life, and finally rose sharply after 1980, coinciding with the skill- (and apparently also urban-) biased technological change of the computer revolution. Over the twentieth century, households and employment have relocated from the central city to the suburban ring. Rising incomes and falling commuting costs can explain much of this pattern, while urban crime and racial diversity also played a role.
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