Structural change reshapes urban expansion: new research published in the Review of Economic Studies

How economies evolve also transforms the spaces we inhabit. The article “Structural Change, Land Use and Urban Expansion”, co-authored by our researcher Marc Teignier together with Nicolas Coeurdacier and Florian Oswald, has just been published in the prestigious top 5 journal Review of Economic Studies. The study examines how two major forces of the past two centuries —the transition out of agriculture and the rise of urbanization— have jointly reshaped land use.

One of the article’s central contributions is to document a striking pattern: urban density in France has fallen dramatically over the last 150 years. During this period, the share of agricultural employment dropped from 60% to less than 2%. At the same time, the urban population quadrupled, while urban land expanded thirtyfold. Yet urban land prices remained relatively stable until around 1960 and only began to rise steadily thereafter.

To make sense of these trends, the authors develop a general equilibrium model with multiple regions and sectors. The results show that the shift out of agriculture was crucial: it enabled agricultural land to be reallocated to urban use without triggering immediate price pressures. Model simulations reveal that the interaction between declining commuting costs and rising agricultural productivity explains much of the observed evolution. Without productivity growth in the farming sector, urban density would have remained constant, or even increased during some periods.

At the regional level, the study also finds that areas with better agricultural land are home to smaller yet denser cities, a pattern consistent with the core mechanism highlighted in the theoretical framework.

This accomplishment brings international visibility to the CREB, BEAT and the UB School of Economics, reinforcing the UB’s role as a leading institution in the study of economic and spatial transformation.

Discover more about the UB School of Economics’ research! Explore the full list of our researchers and their latest research here.

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