Study finds fastest growing cities not the most prosperous

Relationship between growth and prosperity in 100 largest U.S. metropolitan areas

From Economic Development Quarterly 

As communities seek new ways to emerge from the recession, many may look to growing their population as a strategy. However, the belief that population growth will bring jobs and economic prosperity for local residents is a myth according to this study. The author examined the relationship between growth and economic prosperity in the 100 largest U.S. metropolitan areas from 2000 to 2009 to determine whether certain benefits commonly attributed to growth are supported by statistical data. He found that the slowest-growing metro areas had lower unemployment rates, lower poverty rates, higher income levels, and were less impacted by the recession than the fastest-growing areas. In fact, in 2009, local residents of slower-growing areas averaged $8,455 more per capita in personal income than those of the fastest-growing areas.

The study concluded with a comparison of the 25 slowest-growing metro areas with the 25 fastest growing from 2000 to 2009. The slowest growing areas were located in 13 different states, including Connecticut, New York, and Ohio while the fastest-growing areas came from 12 different states, dominated by California, Florida, and Texas.

Abstract

This study examines the relationship between growth and economic prosperity in the 100 largest U.S. metropolitan areas to determine whether certain benefits commonly attributed to growth are supported by statistical data. The annual population growth rate of each metro area from 2000 to 2009 is used to compare economic well-being in terms of per capita income, unemployment rate, and poverty rate. The study finds that faster growth rates are associated with lower incomes, greater income declines, and higher poverty rates. Unemployment rates tend to be higher in faster growing areas, though the correlation is not statistically significant at the 95% confidence level. The 25 slowest growing metro areas outperformed the 25 fastest growing in every category and averaged $8,455 more in per capita personal income in 2009.

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Article details
Eben Fodor (2012). Relationship Between Growth and Prosperity in the 100 Largest U.S. Metropolitan Areas Economic Development Quarterly, 26 (3) : 10.1177/0891242412452782

Tags: community development, job creation, jobs, state and local ED policy