Unit 2: What determines the quality of life in a city? (What do neighborhoods do?)

Summary of issues: Neighborhoods, social capital, education, crime & poverty


Mills and Hamilton: Chapter 9: The problems of Poverty. Chapter 14: pages 347-360 (on education and crime).

Jane Jacobs. The Death and Life of Great American Cities. Finish the book.

Garreau, Joel. Edge City. Chapter 8: Southern California

On the web:

Robert Putnam, Bowling Alone. Interview at: http://muse.jhu.edu/demo/journal_of_democracy/v006/putnam.html

Rosenbaum, James E. “Housing Mobility Strategies for Changing the Geography of Opportunity.” Institute for Policy Research, Northwestern University (1994).

See http://www.northwestern.edu/ipr/publications/Gautreaux.html for the click through.

AND a late addition:

Corman, Hope and Naci Mocan. 2002. Carrots, Sticks and Broken Windows. NBER working paper 9061. July.

Go to the GMU web-site. Click thru to Libraries and Research, then to Library Catalog. Type “nber” into the search, and pick “journal title” as the type of search. Click nber working paper series on the search result, scroll down to “Electronic Resource available to GMU students,...” and click through to the NBER working paper web-site. Then you can search the web site by author, title, etc.

Recommended for reading on your own:

Mancur Olson. Logic of Collective Action or The Rise and Decline of Nations. We will be discussing some of Olson’s insights in this unit.

Banfield. The Unheavenly City Revisited.

Lecture 1-1. September 16, 2003.

Social Capital, neighborhoods and Poverty today.

Education and Crime next week.

Paper for Unit II will be due on OCTOBER 7, 2003.

I. Social Capital and the Problems of Collective Action:

A. Definition – the ties of trust, cooperation, and friendship between people

B. Reasons to value

            1. makes life better

            2. makes democratic society work better

II. Social Capital in America

A. U.S. historically has had a lot

B. Is it declining (Putnam says yes)

III. Putnam – Bowling alone and the decline of social K

A. Evidence – decline in membership, decline in spending time with neighbors

B. Counter-evidence – new clubs not measured

C. Potential Causes

1. Women who work – changes types of links.

            2. TV (the general de-socializing of entertainment)

            3. Suburbia – no real evidence for less social K in suburbs

IV. Cities and Social Capital

A. Social Capital is necessary for city to be a successful place to live & work

            i. Markets can’t do it all

            ii. Governmetn can’t do it all

B. What kinds of neighborhoods and cities encourage (Jane Jacobs)

C. What kinds of neighborhoods hurt social capital?

            1. Blank walls

            2. Single use zoning

            3. cars, no pedestrians

VI. Back where we started

A. Social Capital Agglomeration Economies, and innovation

B. Suburbs

C. The internet

Lecture 1-2: Poverty


Chapter 9, Jacobs on safe and unsafe neighborhoods.

I. How economists think about poverty

A. The very long run – since the 12th century in Europe.

B. Adam Smith and Karl Marx – where do wages come from?

C. Labor Markets and the Marshallian Scissors

D. Poverty and inequality: The “poverty line” and the Gini Coefficient

II. A brief history of urban poverty

A. Industrial Revolution and urban poverty.

B. America in the 19th century: immigration and in-migration

C. The Great Migration

D. Poverty and the flight to the suburbs

E. A look at the numbers

III. Poverty, cities and neighborhoods

A. Concentrated poverty = poor social capital

B. Strain on city tax base (metro fragmentation)

IV. Government programs to reduce poverty

A. Public education

B. Transfers – economics of

            i. Monetary

            ii. In kind

            iii. Welfare Reform

C. Minimum wage laws – economics of.

            i. Elasticity of demand for unskilled labor

            ii. Winners and losers.

Lecture 2-1: Gautreaux Project and it’s lessons

Read: Rosenbaum

I. What is a Natural Experiment

A. The problem of Selection and Bias in observational studies

B. Experiments: Can impose random selection of treatment and control groups

C. Natural Experiment: Something in nature does this for you.

II. The History of Gautreaux

A. Chicago HUD sued under Civil Rights Act for discrimination in Public Housing

B. By consent decree, agreed to relocate a limited number of families

C. Half to go to inner city neighborhoods, half to go to (white) middle class suburbs

III. How it worked

A. Accepted only applicants with history of paying rent on time, no complaints

B. Apartments found by program agents, not by recipients

C. High demand meant most participants took the first apartment offered (random selection)

IV. Results

A. Check that the two groups look “the same.”

            i. unmarried mothers with kids, on public assistance

            ii. kids of similar age, gender distribution

B. Limited impact of program on outcomes for adult women

C. Huge impact of program on outcomes for kids

            i. Education

            ii. Work

            iii. Friends

V. Conclusions

A. Neighborhood matters

B. Even to underprivileged new migrants to neighborhood benefit

C. Quality of Schools especially important

D. What is driving school quality? (No answer today, will come back to this question.)

            i. Resources?

            ii. Management?

            iii. Social Capital?