Josh Lehner of the Oregon Office of Economic Analysis published a study earlier this summer where he looked at employment growth according to city size across the US.
What he found since the Great Recession of 2008-2010 is that larger metros — with populations greater than 1 million people — have rebounded the fastest. They are shown in the light blue line below:
According to Josh:
This is at least partially due to the fact that all those good economic things — agglomeration effects, knowledge spillovers, clustering, etc — happen in certain locations, which are usually bigger cities.
However, if you go back to the 1980s, you find that this trend isn’t consistent. Large metros outperformed in the late 90s. But they were more or less on par with smaller metros during the housing boom of the early 2000s and actually under performed in the early 90s recession.
One possible explanation for this — which Josh proposes — is that the recent housing boom acted as a sort of equalizer for smaller metros. It created stronger population growth outside of the bigger cities.
I buy that.
But then does that mean that going forward big cities will continue to outperform? Is this going to be more or less the new norm? Intuitively, I would think yes.