Gentrification and Changes in the Spatial Structure of Labor Demand
Nathaniel Baum-Snow, Brown University
Daniel Hartley, Federal Reserve Bank of Chicago
September 30, 2015
In the decades following WWII, the central regions of most U.S. metropolitan areas were in decline.Between 1960 and 2000, the aggregate central city population share in the 100 largest metropolitan areas fell from 49 percent to 24 percent while employment share declined from 0.61 to 0.34 (Baum-Snow, 2014). Sometime after 1980, however, the populations of many large cities began to stabilize and central areas of large cities began to rebound. Since 2000, the downtown areas of most central cities have experienced remarkable demographic change. Central neighborhoods in most cities have experienced rapid income growth and new residential housing construction. Areas near central business districts in many cities have experienced faster than average population growth since 1980 (Lee & Lin, 2014). This paper systematically characterizes the roles of various aspects of changes
in demographic supply and neighborhood demand conditions to explain the changing fortunes of central neighborhoods in cities. Using the structure of a standard model of neighborhood choice which we will estimate with highly disaggregated decennial census tabulations, we will assess the welfare consequences of gentri cation for various demographic groups, with a particular focus on assessing such consequences for incumbents in gentrifying neighborhoods.
