Précis
Immigration's
law of motion
Demanufacturing
and urban jobs
Deconcentration
of urban jobs
More and less
unequal
The mass international migrations of the late 19th and early 20th centuries followed a predictable law of motion, notes Harvard professor Jeffrey G. Williamson, but that law is more subtle and complex than many would guess. Where economics would suggest that those with the greatest returns to migration would move most readily, Williamson and his colleagues have found that, "The poorest workers in the poorest regions of the poorest countries did not move even though the return to their move would have been highest." Instead, workers from rapidly industrializing areas moved at rising rates, while migration among workers in mature industrial nations occurred at declining rates.
Thus, the law of motion described an inverted "U": Low rates of migration at the lowest and highest levels of income and higher rates at middle levels. Williamson accounts for this in terms of income constraints on the movement of the most poor and relative satisfaction among the most well-off. In the middle, increasing home income and larger remittances from earlier emigrants lowered the income constraint, while demographic factors created a large pool of the young workers who were most eager to move.
Williamson concludes his NBER Reporter research summary by noting that today's migration levels are actually quite low compared with the mass migration of the last century. He notes, however, that many of the same economic forces are at work.
Demanufacturing and urban jobs
Gene Slowinski of Rutgers University defines demanufacturing as "the disassembly and recycling of obsolete consumer products such as TV sets, personal computers, refrigerators, washing machines, and air conditioners." Writing in
Economic Development Quarterly, Slowinski suggests that such businesses can be profitable, although they do face significant challenges: Lack of a collection infrastructure, limited and cyclical markets for recycled materials, and the fact that most products are not designed to be disassembled for recycling.
Urban centers may have some competitive advantages in solving these problems. The very density of urban population provides a key resource: Large quantities of used products suitable for demanufacturing. Cities also have the transportation infrastructure—ports, rail lines, airports, and highways—needed to bring more widely dispersed used products back to a central location. And cities often contain relatively large labor pools. A successful demanufacturing operation requires a mix of skills, but Slowinski notes that many jobs in the industry are "entry-level positions, designed for people who are comfortable working with their hands."
Employment has become more equally distributed among urban areas since the 1950s. In 1951, the three most job dense metropolitan statistical areas (MSA) accounted for 1 percent of all metropolitan areas, but fully 14 percent of total employment. By 1994, the top percent of areas accounted for 5 percent of employment. At the lower end of the density scale, the bottom 30 percent of areas accounted for less than 4 percent of jobs in 1951 versus 7 percent in 1994.
Gerald A. Carlino goes on to more rigorously analyze the spatial distribution of employment in the July/August edition of the
Business Review published by the Federal Reserve Bank of Philadelphia: "The [Lorenz curve] for 1951 is farthest from the diagonal. Over time, the Lorenz curves have moved toward more equal distribution of employment across MSA."
Carlino also uses a Theil index approach to both confirm his interpretation of the Lorenz curves and to break the analysis of employment distribution down to its between- and within-area components. The within-area index has declined, thus indicating a more equal distribution of employment among the counties that make up metropolitan areas. This, according to Carlino, reflects a widely documented pattern of "suburbanization" of both people and jobs. The between-MSA index, which reflects the nationwide deconcentration of employment, dropped nearly 43 percent, from 1.05 in 1951 to 0.60 in 1994.
That there was a rise in income inequality during the 1980s has been well documented. In a recent NBER working paper,
Understanding Increasing and Decreasing Wage Inequality, Andrew B. Bernard and J. Bradford Jensen examine the common impression that the increase in inequality occurred throughout the U.S. economy. They argue that there has been far from a uniform rise, even among a set of economies with as many similarities as the 50 States.
In particular, they find that several States—Delaware, Mississippi, Alabama, Maryland, Virginia, and Georgia—had either declining inequality or very little change in inequality from 1980 to 1990. Over the same period, New York, Illinois, Pennsylvania, Michigan, Ohio, and Minnesota had the most dramatic rises in wage inequality.
If the six States with the lowest growth in wage inequality were excluded, the overall increase for the United States would have been almost 10 percent more than Bernard and Jensen measured in their analysis. The high-end States had an even more dramatic impact: Inequality increases would have been 23 percent lower in the 1980s if the top six States had been left out. Thus, suggest Bernard and Jensen, heterogeneous State outcomes had an important effect in determining national inequality.
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