Chronically Distressed Metropolitan Area Economies

Abstract

In prior work (Hill et. al., 2012), we examined the ability of regional economies to bounce back after experiencing an exogenous economic shock. In this paper, we build on our earlier work to examine a different type of region: metropolitan areas that have endured chronic low levels of growth over a long period of time. These chronically-distressed regions (or slow-burning regions, as some have termed them) may require a different set of responses than regions that experience external shocks over a period of only a few years. We conceptualize a chronically-distressed region as one whose rate of growth is slow relative to the national economy over an extended number of years. Our data consist of total employment from 1970 through 2007 and gross metropolitan product (GMP) from 1978-2007 for 361 metropolitan statistical areas in the United States. We concern ourselves with the following questions: What factors contribute to a region becoming chronically-distressed? What distinguishes those regions that are able to recover from chronic low-growth from those that are not? For those regions that do recover, what accounts for the duration of their recovery? To answer these questions, we employ a series of cross-sectional and longitudinal models.