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Have central cities come back?, Working Paper 005 Open Access

Did the residents of large central cities really experience a rebound in their economic fortunes since the 1980s? Much has been made of the revival of distressed cities during the 1990s, yet how much of this asserted revival really worked its way down to residents? We find that residents of distressed central cities were, more often than not, worse off in 2000 than they were in 1980. We first construct a four-variable index of the economic well-being of central city residents, called the Municipal Distress Index, for the 98 central cities that had at least 125,000 residents in 1980 with metropolitan area populations of at least 250,000. We then compare the change in the economic wellbeing of the residents of the 33 cities with the lowest index scores in 1980 against (1) their own performance over this time period, (2) the performance of the 65 nondistressed central cities, and (3) the performance of the nation. In the third section we build regression models of change in the index and of each of the components of the index to determine what accounts for the improved economic well-being of city residents. In the last section of the paper we examine the residuals of the models to find out which cities performed much better and worse than expected in terms of promoting the economic well-being of their residents. The residual analysis is offered as an objective means for selecting places for case study.

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