Monday, April 18, 2016

Why New York City Is Dying

Population growth is a negative economic indicator. I'm serious, unlike when I write some city is dying. In the United States, the largest metros with the weakest population growth do much better in terms of prosperity than the largest metros with the strongest population growth. Such "dying cities" can and do perform better than "thriving cities". The boom in Reading's (Pennsylvania) population came with a dramatic climb in poverty rate. Last time I checked, a higher poverty rate was a negative economic indicator. Setting population growth as a policy goal might be the pinnacle of idiocy. I'm happy to leave such concerns to economist Ed Glaeser.

After I have turned population growth on its head, Luke Juday (Demographics Research Group, University of Virginia) does me a solid and turns net positive domestic migration on its head:

While domestic migration is still a good indicator of demand and growth in most counties, it’s less helpful in counties that specialize in a particular age group. Dense cities with limited ability to grow may attract young migrants, causing them to have high natural increase, which in turn pushes out older migrants, lowering the city’s death rate. Conversely, many rural and exurban counties that have become retirement havens are experiencing the opposite effect. Loss of (and inability to gain back) a young adult population has left them with chronically low birth rates and an aging population. This results in rapid natural decrease and population loss, which is then offset by a constant influx of older adults and retirees taking advantage of the low cost of living and slow pace of life.

Because New York City is a magnet for the young and well-educated, it is dying (net outmigration). Every community wants to attract and retain young adults with college degrees. But without robust immigration, succeeding could inform demographic decline. That's right. Plugging the brain drain will cause your town to start dying.

A better way to stop brain drain is to stop educating residents. Less educated young adults are less likely to leave home. Have brain gain cake and eat it too without fear of population loss. Hooray!

In the case of New York, domestic outmigration indicates economic vitality and success. If the population of college grads started going down, I would get concerned. For now, there's the deep talent pool of NYC and then there is everywhere else. Dying never looked so good.

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