Does urban concentration matter for changes in country economic performance?

This paper uses a novel, globally-harmonised city-level dataset —with cities defined at the Functional Urban Area (FUA) level— to revisit the link between urban concentration and country-level economic dynamics. The empirical analysis, involving 108 low- and high-income countries, examines how differences in urban concentration impinge on changes in employment, Gross Domestic Product (GDP) per capita, and labour productivity at country level over the period 2000-2016. The results indicate that urban concentration reduces employment growth, but increases GDP per capita and labour productivity growth. The returns of urban concentration are higher for high- than for low-income countries, and are mainly driven by the ‘core’ of FUAs, rather than by sub-urban areas.