Large populations of college graduates boost employment opportunities in the cities they call home, even when it comes to residents who lack higher education, new research shows.
The study revealed that for each 10 percent rise in the number of residents with a four-year college degree, the area's average overall employment rate rose by 2 percent between 1980 and 2000. The employment rate rose higher for women than men and benefited some of the least educated the most.
"It surprised me at first to find that the biggest, positive effects on employment went to the least educated as an area's college-degree attainment rises," said John Winters, the study's author and an assistant professor of economics at the University of Cincinnati.
One reason suggested for the results is that those with higher levels of education also had higher salaries and were likely boosting local demand for and support of purchased services and amenities, such as lawn maintenance and child care.
"Less-educated women benefited more from this spillover effect because they are more highly represented in certain sectors of the support and amenities portions of the labor force," Winters said.
A second explanation is that people gain skills from working near highly educated workers, and this skill spillover increases the benefits of working, according to Winters
The research is based on the analysis of census data from 1980 and 2000 for those between ages 25 and 55 living in 283 metropolitan areas in the United States, an area covering more than 80 percent of the population.
Winters noted it's important to realize that even a 2 or 3 percent rise in employment for a population represents a large increase.
"When we see the employment rate rise or fall by 1, 2 or 3 percent for any group or area, that's making national news because it's a lot," he said.
Mid-size college towns and cities benefited the most in terms of employment because they generally contain a smaller population with higher proportions of residents who have attended college and earned degrees, the study shows. The research points to towns such as Boulder, Colo., Ithaca, N.Y., and Ann Arbor, Mich.
Among larger cities, Washington, D.C., San Jose/San Francisco, Calif., and Boston, Mass., benefited the most in terms of overall rates of employment thanks to a higher percentage of residents who are college graduates.
Winters hopes to expand the research to focus on data from the 2010 census, which would include overall effects from the Great Recession. He theorizes that metropolitan areas where greater proportions of the population have attained higher levels of education may have weathered the employment effects of the recession better and may have experienced economic recovery more quickly than an area with a lower number of college graduates.
The study, "Human Capital Externalities and Employment Differences Across Metropolitan Areas of the USA," was recently published in the Journal of Economic Geography.