The day before yesterday, I participated in a conference at the Cleveland Fed (I will post the slides in a bit). I got into Cleveland the afternoon before the conference, and so had a chance to walk around its downtown and take in a ball game at Jacobs Field. It was my second visit to Cleveland, and it confirmed my impressions from around 10 years ago: it is a very pleasant city. The Midwest has four declining cities that I quite like--the others are Milwaukee, St.Louis and Pittsburgh--and so it pains me that they are in decline.
The way to explain decline is in one sense easy: lots of literature has shown that since World War II, cities in cold climates have had a very difficult time competing with warmer cities, and cities that relied on manufacturing have been at a disadvantage. Yet some cold climate cities (Boston, Chicago and Minneapolis) have done quite well, and Cleveland has remarkable assets, including one of the World's great medical centers, a first rate university, and among the finest orchestras and art museums anywhere.
Cleveland is also, distinguished, however, by an eye-popping number: a high school graduation rate that is, according to Jay Greene of the Manhattan Institute, 28 percent. High school graduation rates are difficult to calculate, but even if Greene's estimate is off by 10 percentage points, Cleveland's educational system resembles that of a developing country, and its kids are not equipped to be productive.
The poor performance also explains an anomaly: a city with lots of vacant houses has suburbs with newly constructed houses. Its not that the old houses are good--they are not--but given Cleveland's infrastructure, it would be more sensible to raze the vacant houses in the central city, assemble the parcels, and encourage new development rather than have development on the periphery. But one could hardly blame parents looking for houses for avoiding a school district with a high school graduation rate of less than 1/3.
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