A growing body of research is demonstrating a robust positive relationship between the diversity of a city’s foreign-born population in the USA and worker productivity. Other research has focused on diversity within firms, similarly finding positive effects in many cases. Although it appears that diverse teams within firms are better at problem-solving and are more creative, the exact mechanism(s) that drive the relationship between diversity and productivity at the scale of city-regions are less apparent and underexplored in extant research. Drawing on research from several fields, I describe four mechanisms that might drive the relationship between immigrant diversity and productivity at the urban level. I explore each mechanism with a pseudo panel of workers and fixed effects OLS regressions across U.S. Metropolitan Statistical Areas between 2011 and 2017. The results most strongly support that at the urban level, diversity enhances productivity through what I call ‘exposure effects’ and ‘interactive problem-solving’, wherein workers become more productive and more creative through exposure to new cultures and ways of thinking and through joint problem-solving. These results suggest that positive externalities arise when coupling rising immigrant diversity with the social integration of people from diverse backgrounds.
Considering stagnating regional prosperity levels and growing inter-regional disparities in many economies, this paper appeals for a renewed research agenda to deepen our understanding of regional economic development. This is done by discussing different conceptual perspectives, their empirical applications and open questions and suggestions for future research. Conventional approaches view development as an outcome of and dependent upon local economic structure. That is, high regional performance is associated with specific regional industrial and human capital mixes. We argue that to deepen our understanding of the mechanisms that drive regional economic development it is helpful to apply a relational approach that pays attention to the networks between economic actors across different spatial scales, from local to global. These generate knowledge as well as access to technologies, resources and markets, thereby catalyzing income growth. To support regional policy agendas, it is further necessary to go beyond identifying regularities that structure development and engage with differing regional pathways by conducting systematic comparative analyses of local contextual and institutional conditions.
The high cost-of-living in “superstar” US metropolitan areas has become an area of increasing scholarly and policy concern. One question relates to whether low socioeconomic status (SES) and other historically disadvantaged residents are getting pushed out of these city-regions. To unpack what is occurring with respect to migration out of large expensive metros, I examine who is moving out of these areas in the US and where they are going. I use regression, coarsened exact matching, and latent class analysis to understand who is staying within large expensive US metros and who moves out of them, as well as what revealed preferences underlie these moves. I find evidence that lower SES households are slightly more likely to leave superstar US city-regions, though Black, Latinx, and immigrant households are less likely to leave than White and US-born households. Rather than leaving, many low SES households may instead continue to live in these areas while enduring increasingly crowded living arrangements and/or long commutes. The results also highlight substantial heterogeneity in where households go to once they move, suggesting migration out of these urban areas may be more complex than simply the push of high cost-of-living.
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