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Center for Economics and the Environment: Policy Series


The purpose of this paper to examine the data on economic growth across cities in the United States to see if the data supports the notion that cities are major contributors to their state’s economic growth. We find that even though cities account for a disproportionate amount of economic growth in a majority of states, merely having a metropolitan area (or two) in your state does not guarantee economic success for the state. As we narrow the focus to Missouri, we find that over the past two decades not one metropolitan area in Missouri ranks higher in growth rates than 197th out of the 385 metro areas across the United States. In addition, we look at some policy decisions that might account for why some metropolitan areas grow at a lower rate than others do. We look into a specific policy, the imposition of an earnings tax. Since Kansas City and St. Louis city both levy such an earnings tax, such an analysis is not without immediate importance.

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Joseph H. Haslag is a Professor and Kenneth Lay Chair, Department of Economics, University of Missouri-Columbia. Brookelyn Shaw is a Ph.D. student and instructor, Department of Economics, University of Missouri-Columbia. The authors wish to thank Mikhayla White for valuable research assistance.

Funding for this study was made possible by the Hammond Institute’s Center for Economics and the Environment, Lindenwood University.

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Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License
This work is licensed under a Creative Commons Attribution-NonCommercial-Share Alike 4.0 International License.