Urbanization and Productivity

Urban Workers Are More Productive

A blog about business and economics.
April 9 2012 8:35 AM

Urban Workers Are More Productive

More urbanized states are richer ones

Credit Suisse

Via Alex Tabarrok, a new report from Credit Suisse on "Opportunities in an Urbanizing World" (PDF) features a great chart highlighting the link between urbanization and productive labor among American states.

One thing I like about this chart is that it gives us a few excellent "exceptions that prove the rule." Alaska and Wyoming both have economies based on natural resource extraction and thus benefit in per capita terms from low levels of population. If you plopped San Antonio down somewhere in Alaska, that would just mean dividing the oil pie into smaller slices. Many people seem to fear that their local economy is Alaska-like in this respect and that if more people come they'll have to share the wealth. But in reality very little of American life is played out in Alaska-style conditions. The most important resource we have in the vast majority of the country is the other people who live here, so we benefit from urban agglomeration. 

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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