Abstract
The patterns of where households live within the Chicago Metropolitan Statistical Area are examined over the 1990 to 2010 period with respect to their socioeconomic characteristics. It is seen that city–suburban differences in educational attainment have been eliminated over time. This is particularly the case for non-Hispanic Whites living in Chicago who have become substantially more likely to have a college degree relative to their suburban counterparts. In contrast, educational attainment has a rising propensity of African Americans and Hispanics to suburbanize, especially those households containing children of school age.
Trends in location of residence and place of work within metropolitan areas in the United States continue to shift, along with ideas relating to causes and effects. Contrary to past trends, 9 of 10 (and 17 of 20) of the largest central cities in the United States gained population over the past decade. An extreme interpretation of this trend has been termed “the great inversion” by Ehrenhalt (2012) and “the end of the suburbs” by Gallagher (2013). For Ehrenhalt (2012), the (demographic) inversion is “the rearrangement of living patterns across an entire metropolitan area” with the poor living on the outskirts and more affluent living near the center. He suggests that in spite of losing population since 2000, Chicago increasingly resembles Paris today or Vienna in the 19th century with more affluent households living in the center and the poor on the outskirts. However, there are important voices of moderation; others have characterized such changes as modest, noting that suburbs remain the dominant feature of urban areas in the United States (Cox, 2014; Kotkin, 2015).
In this study, we explore patterns and changes in household location in the Chicago Metropolitan Statistical Area (MSA), the third largest metropolitan area in the United States. Particular attention is given to the effects of socioeconomic background as to where households live, especially households having higher levels of educational attainment. Important subgroups of highly educated households are choosing neighborhoods in the city, consistent with shifting preferences for city residential life. Statistical estimates herein also support the view that more skilled workers are located in Chicago because of the higher concentration of skilled jobs in the core.
We see the contribution of our research as providing updated descriptive information on trends in the Chicago MSA and statistical evidence on changes in the effect of socioeconomic variables on household location. In particular, Chicago has become especially more attractive to some groups. We show that, over the 1990 to 2010 period, the effects of a number of variables on living in Chicago have become more positive, including higher levels of education, younger ages (25 to 44 years), and working in the city of Chicago. Similarly, certain household characteristics have become less negative, including having preschool children (called “young kids”) and household income. Certain variables, however, have become more negative since 1990 including African American, Hispanic, and having school-age children. Accordingly, we conclude that a “great inversion” has not occurred, although certain neighborhoods, especially near the core, have indeed become more attractive to more affluent and highly educated households.
Related Studies
Older studies on household location in metropolitan areas focused on the trade-off between housing consumption and commuting costs (Alonso, 1964; Mills, 1967; Muth, 1969). These studies predicted higher land prices in the core as a result of greater employment and population densities in areas near the central business district. Households thus traded off higher commuting costs to jobs in and near the core for more housing consumption in suburban areas where density was lower and housing was cheaper. Although we do not directly test this model below, it still bears on where households locate in the Chicago area.
Over time, population naturally decentralized beyond established central-city municipal boundaries. As cities lost their advantages in keeping industries like manufacturing near city centers, populations further followed jobs to suburban locations. This might be partly reversed today as cities seemingly are attractive locations for selected high-skilled industries like finance, information technology, and business services. Furthermore, residential preferences and shifting residential preferences have also been offered as important determinants where households locate. Glaeser and Kahn (2001) suggest that residential preferences are increasingly the most important factor that drives household location decisions. In particular, after declining economically for many decades, many cities and neighborhoods within cities are increasingly attractive to more educated and affluent households. Glaeser, Kolko, and Saiz (2001) highlight the importance of urban amenities on household location. They suggest that high human-capital households might locate in cities because they have a greater demand for amenities that are more available in cities including museums, specialized restaurants, historic buildings, and interpersonal contacts with diverse neighbors.
In this regard, other research on household location decisions has focused on the effects of central city problems, such as crime and poor schooling options, on the incentive of where to live (Wheaton, 1977). Cullen and Levitt (1999) have shown that more educated households have a higher demand for living in low crime areas like many suburban communities. In the case of the Chicago MSA, crime rates are relatively high in the city of Chicago, although they have declined over the past two decades (Chicago Police Department, 2012).
In recent studies, other factors that may affect where households locate have been stressed as well. Rosenthal (2008) explains how economic change affects the economic status of neighborhoods over time. He shows that neighborhood decline and renewal are related to the quality of housing and other aspects of neighborhoods such as the presence of architecturally significant homes, age of the housing stock, and attributes of neighbors. Numerous studies have examined how neighborhood characteristics affect household location. Bajahi and Kahn (2005) show that White suburbanization is partly driven by a greater demand to live in communities with high human capital; that is, places characterized by residents with high educational attainment and other accumulated skills and experience. Bayer, McMillan, and Rueben (2004) and Bayer, Ferreira, and McMillan (2007) show that households self-segregate throughout metropolitan areas on the basis of household characteristics including race, education, income, and language. For Hispanics, they find that segregation is mostly a product of socioeconomic characteristics like income and education. However, for Blacks and non-Hispanic Whites, they find that race places an important role in segregation, with households self-segregating based strongly on race and secondarily on education.
Chicago Overview
In this section, we provide descriptive information on the Chicago MSA and information on key variables that might affect household location. Data from the 2010 Census of Population indicate that the population of the Chicago MSA was about 9.5 million, with the vast majority (8.7 million) living in Illinois. The rest lived in either Indiana or Wisconsin. In 2010, 2.7 million people lived in the city of Chicago. Thus, the majority of the population in the Chicago MSA lives in Chicago’s suburbs. The population of the city of Chicago declined from 2000 to 2010 after modestly increasing during the 1990s. The population in the city of Chicago is now slightly less than it was in 1990. Although the population of the city of Chicago has declined overall, the area within two miles of its center increased by 48,000 over the past decade. This represented the largest increase in population in an American city within two miles of the city center.
Trends in the location of households in the Chicago MSA parallel changes in the location of jobs. Overall, the number of jobs in the city of Chicago and suburban Cook County has declined modestly over the past two decades. Data on where private sector workers covered by unemployment insurance work indicate a 1% decline in employed workers since 1993 (to 2012) in the city of Chicago and a 6% decline in employed workers in suburban Cook County. At the same time, the most skilled jobs have become more concentrated in the city of Chicago (Testa & Sander, 2010). Census Bureau data that include public sector workers indicate that there was a 9.5% increase in employment in nine zip codes in Chicago’s core for the 2002 to 2011 period. About 50% of the jobs in the city of Chicago are in the core. For the rest of Chicago, there was a 0.5% decline in jobs (U.S. Census Bureau, 2014). To some extent, the growth in the college-educated population in the city of Chicago is a product of a higher concentration of skilled jobs in the city (Testa & Sander, 2010). Aside from this phenomenon, the most important MSA development has been the large growth in employment in the outer ring of suburbs over the past few decades. For example, there has been a 29% increase in private sector employment in the outer suburban ring of counties in the Chicago MSA since 1993 (Illinois Department of Employment Security, 2013).
In Table 1 data are arrayed on the location of households headed by respondents 25 years and older within the Chicago MSA, by race and ethnicity and the presence of children in the household. Overall, the percentage of the population living in the city of Chicago as a percentage of the metropolitan area’s population has declined over time. This is the case for households with school-age children and for households without children. However, this has not been the case for households with preschool-age children. Overall, the population without children is slightly more likely to live in the city of Chicago relative to respondents with children, especially school-age children.
Percentage Living in the City of Chicago by Household Characteristics.
Note. Percentages relative to the Illinois part of the Chicago Metropolitan Statistical Area.
Over time, the percentage of all three groups living in the city of Chicago relative to the metropolitan area has declined. The declines have been particularly large for Blacks and Hispanics since 1990, while the decline for non-Hispanic Whites has been modest. Non-Hispanic Whites without children or with young children are about twice as likely to live in the city of Chicago as are Whites with school-age children. Only 1 in 10 non-Hispanic Whites with school-age children lives in the city of Chicago. This is not the case for African Americans who are as likely to live in the city of Chicago regardless of whether there are children in the household. Hispanics without children are also more likely to live in Chicago relative to Hispanics with children (Table 2).
Racial and Ethnic Characteristics of the Chicago Metropolitan Statistical Area (Illinois Part) Ages 25+ Years.
Furthermore, the school-age population as a percentage of the city of Chicago’s population has continued to decline. Since 2000 (to 2010), the less-than-18 population in the city of Chicago declined by 17%, although it increased by 2% in suburban areas. The largest decline was for Blacks (−30%), followed by non-Hispanic Whites (−12%) and Hispanics (−6%). Most of the decline in the school-age population in the city of Chicago resulted from the relatively large decline in the city’s African American population so that Black enrollment in Chicago Public Schools (CPSs) fell by 19% over the same period. As a result, the Black share of the CPS population declined from 52% in 2000 to 44% in 2010, while the Hispanic share increased from 34% in 2000 to 44% in 2010. The non-Hispanic White share stayed almost the same at between 9% and 10% (Catalyst Chicago, 2012).
The racial and ethnic composition of the population of the Chicago MSA has changed markedly over time. For the city of Chicago, the non-Hispanic White population has declined over a long period of time and has continued to decline since 1990. The African American population has declined since 1990 after increasing over a longer period of time, whereas the Hispanic population has been increasing over the past few decades. The percentage of the suburban population that is non-Hispanic White has been declining, while the percentage that is either Black or Hispanic has been increasing. Blacks and Hispanics now comprise about one in four suburban residents. The concentration of Hispanics has been increasing in all parts of the Chicago MSA over time. In fact, growth in the Chicago MSA over the past few decades has been mostly driven by the Hispanic population. The Hispanic population in the metropolitan area has risen from less than 600,000 in 1980 to almost 2 million in 2010. Since 1980, the Hispanic concentration in the metropolitan area has increased from an 8% share up to 23% in 2010. This represents a growth of almost 1.4 million Hispanics in three decades (Table 2).
One of the interesting trends in the Chicago MSA is that the percentage with at least a bachelor’s degree has increased in the city of Chicago relative to suburbs of the city. Furthermore, the concentration of young college graduates has increased in the city of Chicago relative to its suburbs. In 2010, about one in two college graduates in their 20s lived in the city of Chicago. This is up from 40% in 1990. On the other hand, men and women in their 20s with less than a bachelor’s degree are less likely to live in the city of Chicago in 2010 than they were in 1990. In 2010, about the same percentage in the city as in the suburbs had a college degree. If one goes back to 1990, this was not the case. Suburban residents were much more likely to have a college degree. One of the big changes is that non-Hispanic Whites in the city of Chicago are now substantially more likely to be college educated, while Blacks and Hispanics in suburban areas are slightly more likely to have a college degree relative to their city counterparts (Table 3).
Percentage of 25+ With a College Degree.
Data on median household income by race and ethnicity indicate that there has been a modest increase in the city of Chicago relative to the suburbs of Chicago since 1990. By 2010, median household income for non-Hispanic Whites in the city of Chicago had achieved virtual parity with the suburbs of Chicago, up from a 77% deficit in 1990. Black and Hispanic income in the city of Chicago continues to lag behind their suburban counterparts (Table 4).
Median Household Income, 1989 to 2010 (Percentage of Suburban Income in Parentheses).
Note. Data are nominal income for households where the respondent is 25 years and older.
Growing employment and payroll opportunities located in Chicago’s central area have surely been attractive in the decision to locate household residents in areas that are highly accessible to the central area. As indicated by counts of payroll jobs by job location, employment in the city of Chicago’s central area has remained constant or expanded modestly over the past three decades, even while payroll jobs in the remainder of the city have fallen off sharply (Table 5). That the rising employment opportunities in the core are centered on high-paying professional and financial services industries is reflected in rising compensation trends there (Table 6). As recently as 1998, payroll per worker in Chicago’s central area exceeded both the rest of the city as well as the overall Chicago MSA. By 1998, central area payroll compensation per worker in the central area exceeded the MSA average by 41%, widening to 56% by 2011. Similar trends have emerged in other Midwest cities, such as Detroit, Milwaukee, and Indianapolis, though not as dramatically as in Chicago (Testa, 2011).
Payroll Jobs by Location in City of Chicago and Environs (in Thousands).
Note. Database covers now-defunct definition of MSA (SMSA), which includes Cook, DuPage, Kane, Lake, McHenry, and Will counties in Illinois. The source is Illinois Department of Employment Security, Where Workers Work (2013).
Annual Payroll Per Employee in the City of Chicago.
Note. The source is U.S. Department of Commerce (2014).
Although parts of the city of Chicago have extremely high violent crime rates, overall violent crime rates in the city and suburbs of Chicago have declined over time. In fact, both the city and suburbs had the largest decrease in violent crime rates in the United States since 1990. The violent crime rate declined by 80% in the city and by 83% in the suburbs since 1990 (Kneebone & Raphael, 2011). Thus, the city of Chicago and its suburbs have become safer places to live over the past couple of decades in spite of the city having the most murders in the United States in 2012. This is particularly the case for community areas that have attracted more affluent college graduates during this period (Chicago Police Department, 2012).
Although crime rates have declined in Chicago making it a more attractive place to live, the quality of public schools in the city is still problematic. Following a period of financial chaos and widely recognized performance failures, CPSs began a stream of reform initiatives beginning in 1988. In surveying 30 years of reform, a study by the University of Chicago Consortium on Chicago School Research concluded that test scores have increased only marginally, although high school graduation rates have increased significantly. Nonetheless, the report concluded that “the vast majority of CPS students have academic achievement levels that are far below what they need to be ready to graduate ready for college” (Luppescu et al., 2011, p. 1).
Data and Models
The focus of this study is on empirical estimates of broad demographic patterns and trends as observed at the individual household level. The conceptual underpinnings are relatively simple. It is assumed that household location decisions are subject to utility-maximizing behavior where households maximize a utility function that includes household location and other goods and services subject to an income constraint.
Three data sets are used for the empirical estimates below. For the 1990 and 2000 estimates, we use the 5% Public Use Microdata Sample from the 1990 and 2000 censuses of population and housing. For 2010, we use data from the 2010 American Community Survey. The American Community Survey is a survey of about 3 million households that has been undertaken annually by the Census Bureau since 2005. Sample communities have a population of at least 65,000 and sample areas are defined by Public Use Microdata Areas. Public Use Microdata Areas are areas that have a population of at least 100,000. Respondents who live in the Illinois part of the Chicago MSA are selected. We focus on the Illinois part of the MSA so that we are better able to control for the geographic boundaries of the MSA and so that a sharper focus can be given to city–suburban differences within Illinois. Of the 9.5 million residents of the Chicago MSA in 2010, 8.7 million live in the Illinois part of the MSA. Others live in either Wisconsin or Indiana.
Several different models are estimated. First, probit estimates of living in the city of Chicago relative to Chicago’s suburbs (Illinois part) are undertaken for all respondents 25 years and older. Probit is used because the dependent variable takes on a value of either zero or one. Particular attention is given to estimates for 2010, the most recent year in the data set. The dependent variables in the estimates include educational attainment (relative to high school graduate), dummy variables for age (relative to 65+), four dummy variables for household income (relative to less than $25,000), marital status (relative to never married), whether there are school-age children in the household, whether there are young children (less than 6 years old) in the household, male, Black, Hispanic, Asian, and whether the respondent works in the city of Chicago or a suburb of Chicago. The selection of these variables is based on previous research and what is available in the data sets. For 1990, the question on children in the household was only asked to female respondents. Thus, male householders are excluded from estimates for 1990 that include the children variables. For comparative purposes, we also present an estimate that includes male respondents (and excludes the children variables).
Results
Probit estimates of living in the city of Chicago versus the suburbs of Chicago are presented in Table 7. The first two estimates are for 1990. In the first estimate, all respondents 25 years and older are included. In the second estimate, male respondents are excluded because questions on children were not asked to men, as noted above. All of the results are marginal effects for the variables that are calculated at sample means. The results indicate that having a bachelor’s degree is negatively associated with living in Chicago, while having a graduate degree (for all respondents) is positively associated with living in the city of Chicago. The effect of children is negative, whereas the relationship between income and living in Chicago is negative (second column). The marital status variables are all negative, although Black, Hispanic, and Asian are all positively associated with living in Chicago. Respondents who work in Chicago are more likely to live there, whereas respondents who work in the suburbs are less likely to live in Chicago. For the year 2000, the results are similar with one exception—a bachelor’s degree is now unrelated to living in Chicago.
Probit Estimates of Living in Chicago, 1990, 2000, and 2010, Age 25+.
Note. Coefficients for probit estimates indicate marginal effects at sample means. The omitted category is suburbs of Chicago within Illinois.
Significant at the 5% level. **Significant at the 1% level.
The results for 2010 change in several ways. First, the coefficient for younger children becomes less negative, whereas the negative coefficient for school-age kids becomes more negative. Respondents with a bachelor’s degree are now slightly more likely to live in Chicago, while respondents with a graduate degree are now more likely to live in Chicago. Younger respondents are also more likely to live in Chicago, while the Black, Hispanic, and Asian coefficients decline in magnitude. If one compares the results for 1990 to 2010, the effect of a college education on living in Chicago increases by about .06 or .07. The effect of younger ages increases by .08 for the 25 to 34 years age group and .06 for the 35 to 44 years age group. The negative effect of higher income declines by .05 to .06 for incomes greater than $50,000. The positive effect for working in Chicago increases by .06, while the negative effect of working in the suburbs decreases by .04. At the same time, the positive effect of Black decreases by .08, while the positive effect of Hispanic decreases by .03. Since 2000, the positive Hispanic effect decreases even more (by .07). The positive Asian effect also declined during this period (by .09). The other important change is an increase of about .04 in the negative effect of having school-age children living in Chicago, whereas the negative effect of having younger children decreases by about .03 (Table 7).
An important issue in evaluating the results from Table 7 is whether the coefficients have significantly changed over time. We would note that the standard errors of the coefficients of interest are usually less than .01. The results of undertaking t tests regarding whether the coefficients are significantly different indicated that in most of the variables of interests, there were significant (at the 1% level of significance) changes over time. Key results indicate that many coefficients become more positive or less negative since 1990, including higher education, income, young kids, ages 25 to 54, and working in Chicago. In addition, the coefficients for Black, Hispanic, and having school-age children become significantly more negative since 1990.
In additional estimates that are not presented, we pooled data for 2000 and 2010 and reestimated our models, adjusting for our background variables and interactions with these variables for 2010. These estimates also indicate that in 2010 respondents with a bachelor’s degree or a graduate degree are modestly more likely to live in the city of Chicago relative to respondents with either a bachelor’s degree or a graduate degree in 2000. The effect of income in 2010 is also modestly positive indicating that the negative income effect is smaller in 2010. Similarly, Blacks, Hispanics, and households with children are slightly less likely to live in Chicago in 2010, while respondents who work in Chicago are more likely to live there in 2010.
Discussion and Policy Issues
The data in this study show that residents of the city of Chicago are increasingly likely to have a college degree (a bachelor’s degree or a graduate degree) relative to its suburban residents. This is especially the case for non-Hispanic Whites. This is hardly a “great inversion,” but it does have consequences for Chicago’s economy. The evidence suggests that certain industries are increasingly attracted to locations in the core, especially because of the concentration of talent there, at the same time that job opportunities remain a big draw for household residents who may work in the central area. For this reason, if an adjustment is not made for the location of work, the effect of higher education on living in Chicago increases markedly. As an economic development consideration, Chicago might be even more attractive to industry if the city can enhance its attractiveness as a place to live. Researchers like Florida (2008) and Glaeser (2011) discuss strategies for doing this, including increasing the attractiveness to a wide range of groups, and more conventional strategies like improving schools and reducing crime.
Some of the evidence on industrial location in Chicago seems to support the importance of industries being attracted to concentrations of skilled workers. For example, downtown Chicago has attracted important corporate headquarters including Boeing, Miller Coors, and, more recently, Arthur Daniels Midlands. Furthermore, a number of suburban companies have (or plan to) relocate from suburban locations to downtown Chicago. This includes Sara Lee, Motorola, United Airlines, Career Builders, and Navteq (Gallagher, 2013).
We also provide evidence that suggests the higher education effects on living in Chicago are partly driven through relationships to marriage and fertility. If marital status and own children variables are excluded, the higher education coefficients tend to increase in magnitude. Although the city of Chicago is seemingly increasingly attractive to young college graduates, it has not become more attractive to families with school-age children. Thus, in spite of efforts to improve the quality of public education in the city of Chicago, suburban locations are still more attractive to families with children. This is especially the case for more educated parents with school-age children. If the city of Chicago is going to attract families with school-age children, further improvements in the CPS system may be needed.
Another notable trend includes the migration of Blacks and Hispanics from the city of Chicago to suburban areas. This is especially the case for more educated African Americans and Hispanics. Roughly half of the Black population in the Chicago MSA now lives in suburban communities. Thus, although highly educated non-Hispanic Whites are increasingly opting for a city of Chicago location, this is not the case for Blacks and Hispanics.
Thus, although Chicago has not experienced what has been termed “a great inversion” and the suburbs have not substantially diminished in their importance to the metropolitan area, important changes have occurred. Future research might explore in more detail these changes within the metropolitan area. While some areas are thriving, others are extremely depressed. It is also of interest to investigate whether families with young children who live in the city of Chicago will remain there once their children are of school age.
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.