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Urban cultural amenities and the migration of the creative class

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  • Dalvai, Wilfried

Abstract

This paper models the migration of the Creative Class (Florida, 2003) in a New-Economic-Geography framework. Beside wage differentials, urban cultural amenities play an important role on the choice of location. A public cultural good, financed by taxes, is introduced as an agglomeration force. The public-good is purely consumed by skilled workers. Additionally urban cultural diversity across cities is taken into account to model exogenous differences between cities. I analyze the political equilibrium of tax competition. Furthermore the effects of asymmetries of cities and trade liberalization is examined. There is an optimal level of provision of public cultural goods. In the dispersion-scenario the equilibrium tax rate for workers is hump-shaped with respect to trade integration while for skilled workers it is u-shaped. In the core-periphery scenario the equilibrium tax rate for the core decreases with increasing trade freeness.

Suggested Citation

  • Dalvai, Wilfried, 2016. "Urban cultural amenities and the migration of the creative class," Thuenen-Series of Applied Economic Theory 143, University of Rostock, Institute of Economics.
    • Handle: RePEc:zbw:roswps:143
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    References listed on IDEAS

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    More about this item

    Keywords

    Creative Class; New Economic Geography; Agglomeration; Urban Cultural Amenities; Public Cultural Goods; Tax Competition;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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