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Abstract
We study the scaling of (i) numbers of workers and aggregate incomes by occupational categories against city size, and (ii) total incomes against numbers of workers in different occupations, across the functional metropolitan areas of Australia and the USA. The number of workers and aggregate incomes in specific high-income knowledge economy-related occupations and industries show increasing returns to scale by city size, showing that localization economies within particular industries account for superlinear effects. However, when total urban area incomes and/or gross domestic products are regressed using a generalized Cobb–Douglas function against the number of workers in different occupations as labour inputs, constant returns to scale in productivity against city size are observed. This implies that the urbanization economies at the whole city level show linear scaling or constant returns to scale. Furthermore, industrial and occupational organizations, not population size, largely explain the observed productivity variable. The results show that some very specific industries and occupations contribute to the observed overall superlinearity. The findings suggest that it is not just size but also that it is the diversity of specific intra-city organization of economic and social activity and physical infrastructure that should be used to understand urban scaling behaviours.
Highlights
Urban scaling relationships summarize how the size of a city, usually measured by its total population size, can be used as a predictor for its socio-economic and spatial characteristics [1,2]
This scaling model can be used to evaluate how the productivity of a city varies with the size of its population, and how big a role does city size play in explaining overall productivity of a city
It has been shown in previous research that the above relationship between urban size and productivity in cities across several countries including the USA, China and Germany manifests a superlinear increase of total economic output against city size, or increasing returns to scale [1]
Summary
Urban scaling relationships summarize how the size of a city, usually measured by its total population size, can be used as a predictor for its socio-economic and spatial characteristics [1,2]. It uses a generalized urban production function in which total economic output (total income, wages, GDP etc.) is modelled as a function of total population size of a city as well as several other input factors, such as workers employed in different occupational categories or industrial categories. The coefficients of this more generalized production function are estimated using data from Australia and the USA, and it is shown that when populations are disaggregated in the form of labour input in this way, the total output shows constant returns to scale. We find that larger cities, in general, attract more workers in the highest paid occupations and industries
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