Educational Attainment and Metropolitan Growth

Abstract

This study explores the relationship between educational attainment at the bachelor’s degree level and subsequent economic growth in U.S. metropolitan areas. It reviews the theoretical literature in human capital that predicts faster productivity and income growth in cities that have high education levels and numerous opportunities for inter- action among skilled workers. In this study, the authors found that there was a significant relationship between educational attainment in 1980 and the rate of per capita income and employment growth during the next 17 years. We found some evidence of divergence in the incomes of the most- and least-educated metros, raising the prospect of a new inequality across U.S. regions driven by cumulative differences in human cap- ital stocks. The study lists several possible causes of high educational attainment in metropolitan areas, concluding that this is a difficult but nevertheless worthwhile instrumental goal for policy makers.