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Using Municipal Residency Requirements to Disguise Public Policy

University of Colorado at Denver

Municipal residency requirements require city employees to live within the city limit. Many cities enacted residency requirements attempting to attract middle-class families into the city and to prevent them from leaving. The model developed in this article suggests that a residency requirement can increase a city’s middle-class population but only if it is accompanied by a municipal wage premium. When effective, a residency requirement can also increase the likelihood that a municipal family will enroll its children in private school through a Tiebout sorting effect. Using U.S. census data, the author finds that comprehensive residency requirements are often but not always accompanied by a municipal wage premium. Furthermore, municipal families living in cities with both a residency requirement and a wage premium are significantly more likely to enroll their children in private school.

Key Words: residency requirement • Tiebout hypothesis • school choice • urban land use • regional migration • urban flight

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