A Middle Model of Economic Development? Revisiting the Economic Geography of Middle-Wage Occupations in the United States

Abstract

High-wage regions have frequently been models for economic development policy. However, these places have also been more likely to experience a “hollowing out” of the middle of the labor market, whereby college-educated residents experience high-wage growth, while residents without a college degree do not. This paper studies regions where—in contrast to hollowing out—the share of middle-wage jobs has grown since 1980. Its aim is to understand how—if at all—the characteristics of these regions could suggest a model of economic development that prioritizes opportunities for noncollege graduates. The authors find that regions with a growing share of middle-wage jobs have been associated with higher levels of upward mobility and wage growth for workers without a college degree. These places, such as Wausau, Wisconsin, and Manhattan, Kansas, are associated with higher local school performance and have experienced comparatively high growth in production jobs.