The Interaction of Employment, Geography, and Education

What do New York City, Des Moines, and San Francisco have in common? All three were relatively good places for people with less than a high school diploma to find employment during the Great Recession of 2007-2009. Perhaps not coincidentally, all three are among the 20 metropolitan areas with the highest share of college employment in the United States.

An interesting new report by Alan Berube at Brookings breaks down trends in employment among 100 diverse metropolitan areas in the United States to understand which workers fared the worst, and where they live. The report finds, among other things, that employment declines were much steeper among the less educated workers (2 points) than among college educated workers (.5 points).

Living in a metropolitan area with more educated people was slightly protective for lower educated workers (but the trend was far from uniform). The areas where it was worst to be a lower educated worker were concentrated in the Sun Belt and manufacturing areas, while the areas that were worst for college educated workers were actually areas with large, diverse labor markets (such as Los Angeles and San Diego).

Before 2007, there were larger trends in the structure of the American economy that the recession likely accelerated. Berube writes:

“The Great Recession may have continued, or accelerated, a longer-run trend in these areas of declining job opportunities in middle-skill white- and blue-collar occupations. Metro areas with concentrations in manufacturing employment, such as Toledo, Grand Rapids, Greensboro, Dayton, and Seattle, seemed especially susceptible to this outcome.”

The report recommends a number of fairly vanilla policies to address the effect of the recession for lower educated workers such as job retraining. To my mind, the big question is why not encourage lower educated workers to move to expanding labor markets? This is a recommendation made by several people including former President Bill Clinton. Paul Krugman took issue with this suggestion back in September, claiming that “structural” explanations for unemployment were unfounded and distracted from the lack of policy resolve to stimulate the economy. But this report at least provides some evidence that there is some large, spatial mismatch in the labor market. Finding ways to get people to jobs is not a substitute for a second large-scale stimulus that would boost short-term employment, nor is it a substitute for investments in education that would boost long-term employment, but it’s a start.

About Brendan Saloner

I am a postdoctoral fellow at the University of Pennsylvania in the Robert Wood Johnson Health and Society Scholars Program. I completed a PhD in health policy at Harvard in 2012. My current research focuses on children's health, public programs, racial/ethnic disparities, and mental health. I am also interested in justice and health care.
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6 Responses to The Interaction of Employment, Geography, and Education

  1. Paul Kelleher says:

    Are any labor markets expanding appreciably?

    What worries me about your suggestion is that job creation is not keeping up with population growth, so why think it’ll keep up with increased migration to expanding labor markets? When people pick up and move, they also leave supportive social networks behind. If the move is made before a job is found, the resulting experience in the new location may not be worth the effort. Or is this too facile? I dunwanna be facile.

  2. True. Not many labor market are expanding, but at least some are not shrinking much. Re-sorting workers geographically won’t solve the problem of sluggish expansion, although some people might find it beneficial to get out of stagnant labor markets and into markets where hiring is still ongoing. The point about social networks seems very clearly right to me, and the worry that people may be losing a lot by leaving their support networks is a legitimate concern. So this is a policy intervention that wouldn’t work well in many places, but at least in some parts of the country there are people that would like to move, have social networks in other places, but can’t leave because they are underwater with their mortgage. It would be a reasonable experiment to see if some of these people would like to move to another place, and whether there are jobs in other places to support them.

    There are worse things than facility.

  3. Paul Kelleher says:

    What is your view on just mailing the keys back to the bank and walking away from underwater mortgages? Renting is a better bet these days, and probably will be for the several (i.e. seven) years that it would take to get the blemish off one’s credit history. I’m sure that for a lot of families, ridding themselves of an abusive and unsustainable mortgage would bring tremendous intrinsic relief, not to mention the labor-flexibility side-effects you highlight.

  4. I’m not very qualified to answer that good question since I have a very hazy understanding of how real estate markets and lending work. It seems like a good idea, but then there are the ripple effects on the neighborhood housing values if houses sit empty on the market. I think there’s a big uncomfortable question, about whether it would be a good idea to try to revitalize some of these areas or relocate the people in better markets (Las Vegas, Phoenix, and the sprawl in South Florida may never come back to where they once were as economically viable destinations for working families).

  5. Pingback: Highlights so far… | Inequalities

  6. graceakumala says:

    Thank you for posting such content. This is very relevant to support my campaign about the education of children in Indonesian rural areas. I argued that the geographical characteristic of Indonesia is one of the things that trigger to the uneven distribution of education. The fact that Indonesia is an archipelago makes the rural areas even more remote to the metropolitan cities where infrastructure and education institutions establishments are mainly concentrated on. Comparing my case on Indonesia to yours about New York City has gained me a new insight for my campaign.

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