Abstract
In this chapter we investigate growth differences in the urban system of the EU12 over the last decades of the twentieth century, defined in two distinct ways: as growth in population, off setting for natural change so proxying for net migration; or as growth in real GDP percent. Each of these growth processes is investigated using a family of related models. We do not give substantial technical details of the two families of models used since these are available in Cheshire and Magrini (2006a, b). Rather the purpose is to highlight the similarities and the differences in the drivers of urban population as compared to “economic” growth and in doing so, reveal some interesting features of spatial adjustment processes in Europe and – briefly – how these compare to those in the USA. We start with a brief analysis of population growth in the major city regions of the EU of 12 over the period 1980–2000. These “city regions” are represented as Functional Urban Regions or FURs – as briefly explained in Sect. 16.2. Since we include the rate of population growth in the area of each country outside its major FURs as a control variable, we are, in effect, analyzing the pattern of net migration change over the two decades in each FUR. The conclusion is that interregional migration is orders of magnitude less in the EU than in the USA and that while internal migration flows do respond to the most obvious quality of life differences they do so only as quality of life varies within countries. We also find that national boundaries continue to be substantial barriers to spatial adjustment processes in Europe. The conclusion is, therefore, that in a European context one does not observe spatial equilibrium in a single “urban system”; in other words there are people who could improve their welfare by moving to another city region in another country but constraints on mobility prevent them from doing so.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
For a detailed discussion of the definition of the FURs used throughout this paper see Cheshire and Hay (1989). They are defined on the basis of core cities identified by concentrations of employment and hinterlands from which more commuters flow to the employment core than to any other, subject to a minimum cut off. They were defined on the basis of data for 1971. They are broadly similar in concept to the (Standard) Metropolitan Statistical Areas used in the USA. As has been argued elsewhere (Cheshire and Hay 1989) the great variability in the relationship between administrative boundaries and the economic reality of European cities and regions introduces serious error and a strong likelihood of bias into data reported for administratively defined cities. The FUR/city and region of Bremen provide an extreme but not wholly unrepresentative example. Because of population relative to employment decentralization over the relevant period, the growth of GDP percent is overstated by some 40% if the published Eurostat data for the administrative region is relied on. Even looking only at population growth if we rely on the NUTS data then apparently population of Bremen shrank by 1.8% during the 1980s while the data for the FUR show growth of 2.3%. In fact, the main feature of population change in Bremen during the 1980s was population decentralization. This, of course, contributes to the anomalous measure of GDP percent growth if the NUTS data is used.
- 2.
We have made serious efforts to try to reconcile Eurostat regional GDP data estimated on the ESA79 and ESA95 methods but concluding it simply is not possible. Reluctantly we concur with the advice of Eurostat that: “Concepts and definitions between the two systems ESA95 and ESA79 are very different. In addition, ESA79 data is of very limited comparability between Member States. Therefore it would not be correct to create long series by linking data from the two systems” (Eurostat website – answers to Frequently Asked Questions).
- 3.
The EU institutions deal in so-called Nomenclature des Unités Territoriales Statistiques (N.U.T.S.) regions. This is a nesting set of regions based on national territorial divisions. The largest are Level 1 regions; the smallest for which a reasonable range of data is available are Level 3. These correspond to Counties in the UK (until 1996), Départements in France; Provincies in Italy or Kreise in Germany. Because of cross border commuting flows there is inevitably built-in spatial nuisance dependence with this series. The use of self-contained FURs minimizes this problem.
- 4.
Measured as transit time by road including any ferry crossings and using the standard commercial software for road freight with origins as a historic central point, such as Charing Cross for London, in each core city.
- 5.
Models were estimated in Stata using robust standard errors.
- 6.
Costa and Kahn (2000) provide strong evidence for at least one important source of such productivity gains in larger cities – the increasing human capital of women. As they show, “power couples” – where both partners have high human capital – have an advantage of locating in larger cities since despite extra costs the benefits from richer labor market opportunities and better job matching will, on reasonable assumptions, lead to overall net gains. They further show that, empirically, such a concentration of high human capital couples has been occurring recently in US cities and seems to be related to increased educational qualifications of women.
- 7.
As we stress in Cheshire and Magrini (2006b) we take a very broad view of ‘growth promotion policies’. We emphatically do not confine our definition to attempts to lure mobile investors with location incentives. Such policies probably have a very doubtful potential net benefit. Successful policies might mainly take the form of efficient local public administration, which is business friendly, the efficient co-ordination of infrastructure and economic development and effective education and training policies. Since none of these necessarily cost more than their ineffective counterparts, their strength cannot be measured by local expenditures.
- 8.
During the period analyzed there was a South East Regional Planning Council (SERPLAN) but this was effectively no more than a forum for discussion.
- 9.
Although FURs are defined to be as self contained in commuting terms as possible where they are tightly packed (e.g. in the Ruhr region of Germany) it is virtually zero cost for a worker living on the edge of any FUR to change to commute to the neighboring FUR(s).
References
Audretsch DB (1998) Agglomeration and the location of innovative activity. Oxford Rev Econ Policy 14(2):18–29
Barro RJ (1990) Government spending in a simple model of endogenous growth. J Polit Econ 98:S103–S125
Barro RJ, Sala-i-Martin X (1991) Convergence across states and regions. Brooking Pap Econ Activ 1:107–182
Barro RJ, Sala-i-Martin X (1992) Convergence. J Polit Econ 100(2):223–251
Barro RJ, Sala-i-Martin X (1995) Economic growth. McGraw-Hill, New York
Cheshire PC (1995) Convergence/divergence in regional growth rates: an empty black box. In: Armstrong HW, Vickerman RW (eds) Convergence and divergence among European regions. Pion, London, pp 89–111
Cheshire PC, Carbonaro G (1996) European urban economic growth: testing theory and policy prescriptions. Urban Stud 33(7):1111–1128
Cheshire PC, Gordon IR (1996) Territorial competition and the logic of collective (in)action. Int J Urban Reg Res 20:383–399
Cheshire PC, Hay DG (1989) Urban problems in Western Europe: an economic analysis. Unwin Hyman, London
Cheshire PC, Magrini S (2006a) Population growth in European cities: weather matters – but only nationally. Reg Stud 40(1):23–37
Cheshire PC, Magrini S (2006b) European Urban growth: now for some problems of spaceless and weightless econometrics. Paper given to 46th Congress of the European Regional Science Association, Volos, Greece
Cheshire P, Sheppard S (1995) On the price of land and the value of amenities. Economica 62(246):247–267
Clark C, Wilson F, Bradley J (1969) Industrial location and economic potential in Western Europe. Reg Stud 3:197–212
Costa DL, Kahn ME (2000) Power couples: changes in the locational choice of the college educated, 1940–1990. Q J Econ 115(4):1287–1315
Fujita M, Krugman P, Venables A (1999) The spatial economy. MIT, Cambridge MA
Glaeser EL, Scheinkman JA, Shleifer A (1995) Economic growth in a cross-section of cities. J Monet Econ 36:117–143
Gordon I, Lamont D (1982) A model of labor-market interdependencies in the London region. Environ Plann A 14:238–264
Gyourko J, Kahn M, Tracy J (1999) Quality of life and environmental comparisons. In: Cheshire PC, Mills E (eds) Handbook of regional and urban economics, 3: applied urban economics. North Holland, Amsterdam
Hendry DF, Krolzig HM (2001) Automated econometric model selection using PcGets. Timberlake Consultants, London
Hendry DF, Krolzig HM (2004) We ran one regression. Oxford Bull Econ Stat 66(5):799–810
Keeble D, Offord J, Walker S (1988) Peripheral regions in a community of twelve member states. Office of Official Publications, Luxembourg
Magrini S (1998) Modelling regional economic growth: the role of human capital and innovation. Ph.D. Thesis, London School of Economics
Midelfart KH, Overman HG (2002) Delocation and European integration: is European structural spending justified. Econ Policy 35:321–359
Morrison PS (2005) Unemployment and urban labor markets. Urban Stud 42(12):2261–2288
Oates WE (1999) An essay on fiscal federalism. J Econ Lit 37(3):1120–1149
Roback J (1982) Wages, rents, and the quality of life. J Polit Econ 90:1257–1278
Rodriguez-Pose A, Fratesi U (2004) Between development and social policies: the impact of European structural funds in objective 1 regions. Reg Stud 38(1):97–113
Thurston L, Yezer AMJ (1994) Causality in the suburbanization of population and employment. J Urban Econ 35(1):105–118
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2009 Springer-Verlag Berlin Heidelberg
About this chapter
Cite this chapter
Cheshire, P., Magrini, S. (2009). Growing Urban GDP or Attracting People? Different Causes, Different Consequences. In: Karlsson, C., Andersson, A., Cheshire, P., Stough, R. (eds) New Directions in Regional Economic Development. Advances in Spatial Science. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-01017-0_16
Download citation
DOI: https://doi.org/10.1007/978-3-642-01017-0_16
Published:
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-01016-3
Online ISBN: 978-3-642-01017-0
eBook Packages: Business and EconomicsEconomics and Finance (R0)