Accounting for the Change in Income Disparities between US Central Cities and their Suburbs from 1980 to 1990

Abstract

In this paper we are concerned with the widely acknowledged policy problem of substantially higher levels of per capita income in suburban areas of US metropolitan areas compared to that of their central cities. We focus on causes of changes in this per capita income gap from 1980 to 1990 (for those metropolitan areas where such a gap existed in 1980) in an effort to determine what factors are associated with narrowing of these disparities. We do so by first describing the relationship between central-city and suburban per capita income across American metropolitan areas in 1980 and 1990. We review the connection between the operation of metropolitan labour markets and changes in suburban-central-city income disparities. We then develop regression models of changes in income disparities for all 111 metropolitan statistical areas (MSAs) with populations of at least 250 000 in 1980 and where suburban per capita income exceeded central-city per capita income in 1980. This is followed by a summary of the results.