Monday, July 29, 2013

Sprawl and Economic Mobility: A Comment

Last week the Equality of Opportunity Project released a report about inequality in the United States. Many people have picked up on this report from the NY Times front page story about the findings. This is an important and interesting piece of research that focuses on how tax expenditures affect intergenerational economic mobility. What this research does not do is relate the findings to urban sprawl, though some other people have. See here, here, here and here

In the EOP report, the authors use Commuting Zones, which are similar but not identical to Metropolitan Statistical Areas, to evaluate intergenerational mobility. They found that tax expenditures play some role, and that:
Although tax policies may account for some of the variation in outcomes across areas, much variation remained to be explained. To understand what is driving this variation and better isolate the effects of the tax expenditures themselves, we considered other sets of factors that have been proposed in prior work. Here, we found significant correlations between intergenerational mobility and income inequality, economic and racial residential segregation, measures of K-12 school quality (such as test scores and high school dropout rates), social capital indices, and measures of family structure (such as the Summary of Project Findings, July 2013 fraction of single parents in an area). In particular, areas with a smaller middle class had lower rates of upward mobility.
The results show that Atlanta has poor economic mobility. You can see the city rankings here, and keep in mind these are county level data reported at the Commuting Zone aggregation. This is why you have New York and Newark reported differently as they are two Commuting Zones but the same Metropolitan Statistical Area.

The Atlanta case has been used to argue against sprawl (see links above). Yet the best performing cities (CZs) in the study are sprawling, too. Sorting the 100 largest cities we see that Bakersfield, California performs best, followed by Santa Barbara and Salt Lake City. Bakersfield is a poster child for sprawl. New York, paragon of density, performs above average in the EOP research but the city remains very segregated. Richard Green's quick analysis suggests that density is positively related with EOP metrics, but city size is negatively correlated. This presents a conundrum for causality but perhaps suggests something else is at play. For instance, density may not cause economic mobility but rather places with economic mobility and vibrancy also represent better employment pools and more productive workers. This might lead to higher land prices (firms find it more desirable to be there) and more intensive use of space. There are many reasons to suspect that density is an effect, not a cause.

But let's get back to the example in the NY Times, which seems to have gotten everyone thinking about Atlanta in the first place. Here is the first paragraph:
ATLANTA – Stacey Calvin spends almost as much time commuting to her job — on a bus, two trains and another bus — as she does working part-time at a day care center. She knows exactly where to board the train and which stairwells to use at the stations so that she has the best chance of getting to work on time in the morning and making it home to greet her three children after school.
This opening misleads the reader as to what the report says as the report does not look at any transportation or land use variables. But does this unfortunate situation for Ms. Calvin represent a problem with sprawl? I don't see it. She lives in an area with lots of transport choices, including buses and trains. She even considered moving but decided against it. It strikes me that the real problem is that she--for whatever reason--is working a common, part-time job so far away. Why? I have a hard time believing that there is not an equivalent or better part-time job available closer than two bus rides and two train rides away. Of course, a job is more than a paycheck for many people, but that's a different set of issues than sprawl.

We know that social contacts are critical for job searches, and this was measured in the EOP report. Concentrated poverty and social isolation creates a vicious spiral of greater isolation because social networks contract. This is not necessarily a transportation and land use problem. Better cities will benefit everybody, but at least from the EOP report we can't claim any type of causal relationship between sprawl and economic mobility. You can construct a plausible scenario where a sprawled metro where each worker has a car offers the greatest economic mobility because households are not limited to employment only where transit goes.

Overall, the results from the EOP study are provocative, and the relationship between metropolitan spatial structure and economic performance needs much more research. These types of questions require time-series analysis, however, as snapshot correlations really don't mean anything and will provide evidence for whatever point of view is desired. What I suspect is likely the case is that the value or cost of sprawl on economic mobility depends greatly on when the data are measured. What holds true now may not be at all the same as what was true forty years ago. I also suspect there are multiple equilibria for optimal city size and form.
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