Far from being “A Tale of Two Cities,” the new 2020 United States Prosperity Index shows that, at a county level, American prosperity is better described as a tale of the big city and the small town.
Across the nation, urban counties tend to have a higher level of prosperity than their rural counterparts. However, the key difference is not the extent of prosperity but the type of prosperity — while on average urban counties have better economic performance and social well-being, rural counties are safer and have stronger social networks.
The physical structure of a city confers many economic advantages, such as higher quality transport infrastructure, a greater density of employment opportunities, and more sophisticated and wide-reaching telecommunications infrastructure: 99 percent of people in the urban counties analyzed in the index have access to internet speeds of over 100Mbps, compared to just 69 percent of people in rural counties.
The structural benefits of urban areas enable businesses to start and grow and act as a magnet for talent, attracting highly educated people from across the country and around the world. This is reflected in the levels of adult skills, with the percentage of adults holding at least a bachelor’s degree being twice as high in urban counties as in rural counties.
These structural advantages also mean that urban areas tend to attract a larger working-age population of certain employment types, while rural areas are more popular with seniors, which goes some way to explaining the higher community engagement outside big cities.
Urban residents are more likely to be knowledge-based workers employed in the financial and insurance sector or professional, scientific and technical services — in fact, the proportion of the workforce who are knowledge workers is almost three times higher in urban than rural counties, while the proportion of government workers is much lower.
There is a consistent correlation between the proportion of knowledge workers in a county and the level of overall prosperity, and a slight negative correlation between the proportion of government workers and prosperity.
Beyond purely economic benefits, the urban environment also provides the basis for better healthcare — people generally live much closer to hospitals and clinics. However, there can be significant health drawbacks associated with high population density, as we have seen with devastating effect with the COVID-19 pandemic.
Additionally, while cities bring different people together, boosting creativity and sparking new ideas, they also change the way that bonds of trust are formed, which can lead to more transactional than personal relationships.
Although levels of institutional trust and social tolerance are higher in urban counties, levels of civic and social participation, in particular the amount of time that people spend engaging in community activities, is lower.
In addition to the sense of community spirit, many Americans also value the nature of life in rural areas, such as lower levels of crime and better air quality. Rates of robbery are on average 89 percent lower in rural than urban counties, and the number of ‘life years’ lost to pollution is 32 percent lower.
While there are some general differences between urban and rural areas, it is clear that no single factor can be a prosperity panacea; there is a huge level of structural diversity in the top-ranked counties in the index.
For example, urban Nassau County (New York), with a population density of more than 4,500 people per square mile, is roughly as prosperous as rural Mineral County (Colorado), which has fewer than 1 person per square mile.
Likewise, San Mateo County (California), with almost 40 percent of its workers in knowledge jobs, is as prosperous as Winneshiek County (Iowa), which has fewer than 5 percent of its workforce in equivalent jobs.
The index shows that there is no single path to greater prosperity.
The key thing is for each county, and each state, to use the data in the index to understand their unique strengths and weaknesses, and develop strategies and policy responses to strengthen institutions, create more open economies, and improve the lived experience of residents, to increase prosperity for all Americans.