Philadelphia is becoming a test case for a new theory of American urban development.

The conventional wisdom used to be that economic development was the key to cities' dynamism. Create jobs, the argument went, and people would follow, incomes would rise, and all would be well.

Now an alternative idea is being preached by a growing number of urban analysts. It holds that quality of life has become more crucial to a city's prospects, because young adults demand it, and many jobs no longer have to be in a particular place. Establish an attractive setting, this theory says, and talented people will come; sooner or later, the jobs will, too.

The first two elements of this prescription are becoming a reality here. In Center City and surrounding neighborhoods, Philadelphia has established a vibrant urban landscape. And in recent years, the population has grown, fueled by an influx of young adults.

The jobs, however, have been slow to materialize. In 2012, the city had fewer than in 2008, before the recession had taken its toll.

Can a city keep growing without expanding employment opportunities? Will young adults continue to turn gritty neighborhoods into urban hot spots if they must commute to the suburbs or beyond? Without more city-based jobs, will enough new people - twentysomethings, empty-nesters, immigrants, and everyone else - come and stay, sustaining Philadelphia's momentum?

These are some of the questions raised by the data in the new Pew report "Philadelphia 2013: The State of the City."

Some of the city's key demographics are positive in ways they haven't been for decades. From 2006 through 2012, after falling for half a century, Philadelphia's population grew by 58,897, to 1,547,607, according to the most recent census estimates, and it became more diverse in the process.

Over those years, 20- to 34-year-olds' share of the population grew from 20 percent to 26 percent, according to census estimates. This accounts for the entire citywide population increase and more.

These young adults are well-educated; 37.5 percent have at least a bachelor's degree, an increase of 10 percentage points from a decade ago. Although the young adult populations of Washington, Boston, and New York are more educated, Philadelphia's young people are more likely to have a college degree than their counterparts in Los Angeles, Houston, Phoenix, and nationwide. (Of all Philadelphia adults, however, only 23.6 percent are college graduates, which is substantially below the national rate, 28.2 percent.)

Educated young adults are the people a city needs to attract and retain. But the local economy has not been helping. In 2012, Philadelphia had 661,400 jobs, 1,900 fewer than four years ago.

To be sure, a lot of major cities have struggled to get back to the levels of 2008, before the downturn made thousands of jobs disappear. But over the last few years, Philadelphia has lagged behind much of the country in job creation. In 2012, the city's unemployment rate remained stubbornly high at 10.7 percent, or 2.6 percentage points above the national level.

And Philadelphia continues to be plagued by a litany of familiar problems. According to the most recent census data, it has one of the highest poverty rates among major cities, 28.4 percent, and one of the lowest median household incomes, $34,207.

The incidence of crime also remains relatively high. While overall crime fell slightly in 2012, the homicide rate rose 2 percent. From 2007 through 2011, 88 percent of the city's homicide victims were men, and four out of five were African American. Eighty-two percent were shot, and 81 percent had a criminal record.

Public education also remains a source of concern. The new schools superintendent, William R. Hite Jr., has had to contend with a large supply of old, underused school buildings, continuing budget woes, and a drop in test scores, possibly due to new procedures to prevent cheating.

But there are positive signs for the city beyond the influx of young adults.

On the environmental front, fewer and fewer vehicle miles are being driven, use of mass transit is up, more energy-efficient buildings are coming online, and serious air pollution is less common.

The housing market, meanwhile, is showing signs of life. Median sale prices rose 18 percent over the last two years. Home sales rose slightly last year, and residential building permits were issued for more units than in any year since 2005. The new construction contributes to the sense that the city is heading in the right direction, and to the hope that the population will continue to grow - and ultimately produce more jobs.

That is one theory of urban life in America these days, and Philadelphia is counting on it.

Larry Eichel directs Philadelphia research at the Pew Charitable Trusts. "Philadelphia 2013: The State of the City" is available on Pew's website at