While working on his Ph.D. at Yale in 2016, Fabian Eckert, out of curiosity, took a look at statistics the university kept on its outgoing class of undergraduates.
“The thing that was striking was about 54 percent of them moved to just five big cities,” Eckert said; namely, Boston, Los Angeles, New York, San Francisco, and Washington, D.C.
More intriguing, the students moving to those places were inordinately going into the “skilled tradable services sector,” meaning fields such as accounting and information technology.
Eckert suspected it wasn’t just Yale.
Fabian Eckert, Postdoctoral Associate, Princeton University
In his latest research
project, he found that workers from all around the country were moving to these so-called superstar cities, which offer rapidly rising wages unmatched elsewhere.
“That has interesting implications, we believe, for regional inequality because it means large parts of the country are increasingly drained of the most well-trained, the most well-educated workers,” he said.
Previously, Eckert examined workforce changes following the industrial revolution. Unlike today’s shift to a service economy, the shift to manufacturing saw factory jobs grow across the nation and not just in a few places.
What’s different now is the effectiveness of communications technology. Big cities with an overwhelming advantage in skilled tradable services can compete anywhere instead of being confined to their local region.
Eckert said he’s always been interested in why some places are developed and some underdeveloped. In college, he gravitated toward economics because the “analytical clarity” of numbers and equations helps explain these kinds of real-world issues.
With the coming of big data, in Eckert’s view, the discipline of economics has become more vital. “It has the ability to not just use the data,” he said, “but, before that, develop a theory of what should happen and what we should be looking for.”