Population loss doesn't always equate to economic decline. Richard Florida discusses a study examining American metros that are retaining their economic vitality as they shrink.
"Population growth is a crude measure of prosperity: As long as a place attracts or retains specific talent, it can lose general population and still be prosperous," Richard Florida writes. As evidence, he points to a study by Cardiff University's Maxwell Hartt looking at the economic performance of shrinking cities.
While we often picture shrinking cities as economically bereft, "shrinking population and economic decline don’t always come hand-in-hand: A striking subset of cities with declining populations are in fact economically prosperous." Hartt finds that 27 percent of shrinking cities have economic indicators outperforming their regional average. Most of them are suburbs and outlying towns close to large, wealthy metro areas.
Florida speculates that what sets these places apart is their ability to retain educated residents, who may be professionally based in the corresponding big cities: "97 percent of prosperous shrinking cities had a higher proportion of college-educated individuals than their regional average."
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