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The Rise and Fall of Urban EconomiesLessons from San Francisco and Los Angeles$
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Michael Storper, Thomas Kemeny, Naji Makarem, and Taner Osman

Print publication date: 2015

Print ISBN-13: 9780804789400

Published to Stanford Scholarship Online: May 2016

DOI: 10.11126/stanford/9780804789400.001.0001

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The Motor of Divergence

The Motor of Divergence

High-Wage or Low-Wage Specialization

Chapter:
(p.29) 3 The Motor of Divergence
Source:
The Rise and Fall of Urban Economies
Author(s):

Michael Storper

Thomas Kemeny

Naji Philip Makarem

Taner Osman

Publisher:
Stanford University Press
DOI:10.11126/stanford/9780804789400.003.0003

The specialization of urban regions in different tradable industries is the source of significant differences in wages and income levels. Los Angeles was more specialized than San Francisco in 1970 but considerably less specialized in 2010. During this period, San Francisco consolidated its specialization in activities related to information technology, and Los Angeles consolidated its hold on the entertainment industries, but Los Angeles lost many other high-wage specializations it formerly contained, replacing them with low-wage specializations. Los Angeles also lost its lead over San Francisco in innovative sectors, as the latter soared in its per capita patenting rate. All in all, Los Angeles’s economy came to have less overall focus and sophistication, while San Francisco’s came to have more.

Keywords:   comparative advantage, tradable industries, agglomeration, clustering, occupational tasks, task content, innovation, patenting, economic specialization, economic diversification

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