Full Citation

Title: Distance and Decline: The Case of Petersburg, Virginia

Citation Type: Working Paper

Publication Year: 2018

ISBN:

ISSN:

DOI:

NSFID:

PMCID:

PMID:

Abstract: Petersburg, Virginia, prospered over two centuries as a center of production and trade. However, the city experienced economic difficulties beginning in the 1980s as a large number of layoffs at production plants in the area coincided with an erosion of retail trade in the city. Prolonged economic decline followed. In contrast, somewhat similar shocks in other moderate-sized cities in Virginia were followed by gradual economic recovery. We examine these differing outcomes and offer an explanation that hinges on the proximity of Petersburg to its larger neighbor, the greater Richmond area. We find evidence suggesting that after the job declines, higher-skilled residents in Petersburg initially commuted to jobs nearer to Richmond, later relocating from Petersburg toward Richmond--an option not readily available in the other Virginia cities considered. We suggest that, as a result, Petersburg suffered a sharp decline in tax revenues and that municipal costs could not be proportionately scaled down, leading to severe fiscal stress.

Url: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3270132

User Submitted?: No

Authors: Owens, Raymond, E; Pinto, Santiago

Series Title: FRB Richmond Working Paper

Publication Number: 18-16

Institution: FRB Richmond

Pages:

Publisher Location:

Data Collections: IPUMS USA

Topics: Other

Countries: United States