Document Type

Working Paper

Publication Date



Regional Research Institute

Document Number



Regional Research Institute


The socioeconomic gap between metropolitan and nonmetropolitan areas increased during the 1980s. We test three competing explanations for this trend during the 1980s: overdependence on manufacturing, especially in nonmetro labor markets, the emergence of producer services as a catalyst of socioeconomic growth, and federal spending. Using a model that is informed by a variety of perspectives in sociology and economic geography, and commuter zones (CZs) as spatial units of analysis, we estimate the effects of manufacturing concentration, producer service concentration, and federal spending on per capita income, per capita earnings, and private nonfarm employment growth during the 1983-1988 business cycle recovery. The OLS and interaction models show that all three factors help explain why metro areas outperformed nonmetro areas during this time period. The effects of producer service concentration, however, best fit with our expectations. Implications of our findings are discussed.