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short essays and reports on the economic issues of the day
2004 ■ Number 24

Metropolitan Growth: Sun Belt vs. Snow Belt
Rubén Hernández-Murillo
or more than a century, cities in the United States with
reveals no significant correlation between skill levels and subsemore skilled residents have grown faster than comparable
quent population growth, perhaps, in part, because the Sun Belt
cities with fewer educated people.1 The reasons why the
receives a disproportionate share of the immigrant population.
relationship between skills and population growth is so persistent
The same pattern arises if, instead of population growth, one
are not clearly understood. One explanation proposes that skills
examines employment growth, as measured by the change in the
(measured by the percentage of residents with a bachelor’s degree)
number of employed civilians aged 16 years or older. The correfoster growth because an educated population is an indicator of
lation between employment growth in the 1990s in Snow Belt
favorable quality of life, which attracts more people to a city. An
metropolitan areas and the initial level of skills is 0.39, whereas
alternative explanation argues that having skilled residents allows
the correlation is only 0.03 in Sun Belt metropolitan areas.
cities to grow because educated people adapt more easily to a
One caveat—which we can call the Las Vegas explanation—
constantly evolving economy. The latter explanation views skills
is that relatively low-skilled service workers comprise a large share
as a production amenity, whereas the first views skills as a conof a Sun Belt metropolitan area’s permanent population, even
sumption amenity.
though the share of college-educated people in the city at any
Recent evidence suggests that productivity drives most of the
given time—including tourists and snowbirds—may be actually
connection between skills and growth, especially in metropolitan
quite high. ■
areas, supporting the production amenity explanation. Economists
Glaeser, Edward L. “Why Does Schooling Generate Economic Growth?”
Edward Glaeser and Albert Saiz have found that education levels
Economics Letters, 1994, 44(3), pp. 333-37.
have a positive impact on the growth of wages and housing prices,
Glaeser, Edward L. and Saiz, Albert. “The Rise of the Skilled City.” NBER
as a result of rising productivity. If skills are merely consumption
Working Paper No. 10191, National Bureau of Economic Research, 2003.
amenities, they argue, then wages would decline following migra3
Bureau of Labor Statistics. “Warm Areas Continue Hottest Job Growth.” Issues
tion to a city.2
in Labor Statistics, May 1997.
Interestingly, the relationship between skills and city
growth does not hold among all types of cities. In the
latter part of the 20th century, cities with warm and dry
Population Growth in Cold MSAs
climates have dominated the list of the fastest growing
(Average January Temperature under 408F in 1961-90)
metropolitan areas, in terms of both population and
log (Pop 2000) – log (Pop 1990)
employment growth.3 A favorable climate, especially since
the advent of air conditioning, seems to have spurred
growth in such areas without relying on a high level of
education in the local population. The correlation between
skills and growth, however, seems to be more important
in cold and wet metropolitan areas (the Snow Belt) than
in warm and dry locations (the Sun Belt).
Line of Best Fit
The chart presents the correlation between the fraction
of residents aged 25 years or older with college degrees as
of 1990 and population growth in 155 Snow Belt metro0.000
politan areas over the 1990-2000 decade. The correlation
between skills and population growth is 0.52 and the
relationship is statistically significant. The line of best fit
in the chart suggests that, as the fraction of people with
Share of Residents with Bachelors’ Degree in 1990
bachelor’s degrees increases by 1 percent, population
NOTE: Data are from the U.S. Census Bureau.
growth in the following decade increases by 1.2 percent.
A similar exercise among Sun Belt metropolitan areas


Views expressed do not necessarily reflect official positions of the Federal Reserve System.