Does urban concentration matter for changes in country economic performance?

This paper uses a novel, globally harmonised city-level data set - with cities defined at the Functional Urban Area (FUA) level - to revisit the link between urban concentration and country-level economic dynamics. The empirical analysis, involving 108 low- and high-income countries, examines how differences in urban concentration impinge on changes in employment, Gross Domestic Product (GDP) per capita and labour productivity at country level over the period 2000-2016. The results indicate that urban concentration reduces employment growth but increases GDP per capita and labour productivity growth. The returns of urban concentration are higher for high- than for low-income countries and are mainly driven by the 'core' of FUAs, rather than by suburban areas.

Automated summary

Urban concentration has significant impacts on national economies, reducing employment growth while increasing GDP per capita and labor productivity growth. The returns of urban concentration are higher for high-income countries and are mainly driven by the 'core' of Functional Urban Areas, rather than suburban areas.