Growth in Australian Cities

This paper is an empirical investigation of the determinants of city growth in Australia from 1981 to 1991. Our basic goal is to explain the population and labour force growth of a cross-section of cities in the time period using variables representing the initial characteristics of cities. While we find that city growth is negatively correlated with initial size, government sector employment and a city's level of specialization, we also find it to be positively correlated with various measures for the degree of human capital investment in the city. Our results, while simple and non-structural, mirror the conclusions of studies in the US indicating the importance of studying city level growth in order to understand economy-wide growth.