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Striking disparities characterise the population growth of cities in industrialised countries. Some cities suffer from ongoing population decline, whereas other cities have experienced increasing numbers of inhabitants in recent years. Whether labour market conditions or amenities via their impact on migration primarily account for differences in cities’ demographic development is an important issue. This paper investigates the determinants of the migration balance of German cities between 2000 and 2007. The focus is on the mobility of workers because labour migration in particular affects the future prospects of cities. The findings suggest that not only labour market conditions but also amenities have an impact on the net migration rate. Moreover, large cities seem to be, ceteris paribus, more attractive than small cities. This finding possibly points to the importance of amenities such as cultural infrastructure and matching externalities in urban (labour) markets that are linked to city size. Urban policy aimed at enhancing the attractiveness of cities should thus consider both boosting the local economy and improving the quality of life. [ABSTRACT FROM PUBLISHER]

One of the enduring conclusions of political economy is that the government’s share of the economy tends to grow over time and with a rising gross domestic product (GDP) per capita. Yet, from the late 1980s through to 2008, government spending as a percentage of GDP declined in the typical year in affluent democracies. Synthesizing and building on literatures on the welfare state, state size and neoliberalism, we evaluate three explanations for the expansion and retrenchment of government spending as a percentage of GDP. We estimate fixed effects models of three measures of changes and cuts in government spending. In the full sample 1971–2008, changes and cuts were driven by the structural pressures of unemployment and trade openness, and the institutional factor of the adoption of the Euro. However, this conceals important historical variation. In the earlier period of expansion, the power resource of unionization was the most robust influence. In the later period of retrenchment, changes and cuts were shaped by the adoption of the Euro and a set of structural pressures. In contrast to previous research, changes and cuts in government spending are not associated with a country’s GDP per capita after the mid-1980s. We conclude by discussing implications for the welfare state and neoliberalism, and by encouraging caution for universal theories of state size. [ABSTRACT FROM AUTHOR]