Ryan Avent

More density=better jobs

Author, "The Gated City;" correspondent, The Economist, Sep 07, 11.

“HELL is other people,” wrote Jean-Paul Sartre. He nonetheless spent much of his life in Paris, the better to interact with other French intellectuals. Cities have long been incubators and transmitters of ideas, and, correspondingly, engines of economic growth.

That has never made the crowds less annoying. Maybe that’s why people try to tame the city by chaining it down and limiting who can build what where along its quieter streets. We lobby leaders to fight development, aiming to protect old buildings and precious views, limit crime and traffic, and maintain high-quality schools. But what makes a city a city and a not-city a not-city is the fact that a city is dense and a not-city isn’t. The idea of it may chill a homeowner’s heart, but the wealth supported by urban density is what gives urban homes their great value in the first place.

And when it comes to economic growth and the creation of jobs, the denser the city the better.

How great are the benefits of density? Economists studying cities routinely find that after controlling for other variables, workers in denser places earn higher wages and are more productive. Some studies suggest that doubling density raises productivity by around 6 percent while others peg the impact at up to 28 percent. Some economists have concluded that more than half the variation in output per worker across the United States can be explained by density alone; density explains more of the productivity gap across states than education levels or industry concentrations or tax policies. MORE

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