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City-Suburban Income Disparities and Metropolitan Area Employment

Can Tightening Labor Markets Reduce the Gaps?

Cleveland State University

Harold L. Wolman

Wayne State University

Were tight metropolitan labor markets in 1990 associated with narrow spatial income disparities between central cities and their suburbs? In U.S. national policy, it is assumed that maintaining high levels of national economic growth will attract inner-city poverty populations into the world of work, thereby reducing suburban-city income gaps. The authors examine the impact of tight labor markets on these disparities by developing regression models for metropolitan statistical areas. Economic growth, fostering tighter labor markets, is clearly desirable. However, tightening local labor markets actually exacerbates disparities to a point. Past that point disparities begin to decrease, but at a very slow rate.

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