Abstract
This paper examines the empirical link between the growth of production in a central city and the distribution of income among its residents, by race and ethnicity, within an input-output modeling approach. The specific case of Miami, Florida is considered. This paper reviews the recent historical experience, which reveals considerable growth of employment in the central city at the same time that per capita income of city residents has declined. The decline in income has been particularly acute among black families. This discussion is followed by a presentation of the model and the estimation of model parameters. Income multipliers and their distributional effects are presented. The results show that in Miami, the present character of economic growth has few direct economic benefits for a large majority of the city’s residents.
Highlights
This paper examines the empirical link between the growth of production in a central city and the distribution of income among its residents, by race and ethnicity, within an input-output modeling approach
The city represents the urban core of the metropolitan area: it remains the largest employment center; it is characterized by the highest residential densities and intensities of land uses; and it contains much of the metropolitan area's lower income housing
Between 1979 and 1983, the median family income of city residents declined by 17 percent in real terms (Cruz 1989)
Summary
In southeastern florida, is the central city of the greater Miami metropolitan area. Between 1979 and 1983, the median family income of city residents declined by 17 percent in real terms (Cruz 1989).. The median family income of black residents, declined by 43 percent in real terms during this same short period. The observed declines in income reflect changing residential patterns in the metropolitan area, with poorer families moving into city neighborhoods and more affluent families migrating to higher quality housing outside the city. 18 percent of blacks who held jobs and lived within the city of Miami were employed in these occupations. To the extent that income distribution across racial and ethnic groups is the result of the growth and composition of economic production, as well as changing residential patterns, the income trends observed during the 1970s are likely to have continued in the 1980s. The extended input-output model presented provides some empirical evidence on the link between income distribution and production
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