Rising City Inequality
Barkley Rosser pointed to me to an ’05 meta-analysis of tail-power estimates for city distributions:
The estimated [power α] is on average not 1.0. If the regression is properly specified in the Pareto form, the pooled estimate of α is considerably larger than one, close to 1.1. … Point estimates of α are significantly smaller if the estimate is based on population data for metropolitan areas (instead of inner cities), the estimate is based on data for recent years, the estimate is for the US city size distribution, the sample comprises only a small number of observations, and the study reports only a single estimate.
So while this confirms that for US cities recently the tail-power is close to one (as I had cited before), it is higher in the rest of the world, and in the past. See this graph of power vs. year AD:
Inequality in cities has indeed been increasing over the last few centuries. And it may well increase more in the future.
So who bemoans increasing city inequality? Who wants to redistribute success from the 1% of cities, e.g., Tokyo and New York, to the many smaller cities? Few it seems, because while many dislike inequality in wealth or firm size, most seem to like city inequality.
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I do not think that the emplyee side is the big deal. Although moving as an employee is not necesarily so easy as the job vacancy of the type that you want must be open and there must not be better candidates.
The real problem where there are large firms is when they get a monopoly because of the network effect and strangle the market and so customers cannot get what they want because there are no effective competitors to buy from.
Also I live in the largest city in my nation. I really wish that it would stop growing. Having so many people crammed into it just pushes the real estate prices up ridiculously high. I worry that my kids will not be able to afford to live nearby.