It’s clear that the economic crisis is having uneven impacts on different types of workers and different kinds of communities. Highly educated people and highly educated places are holding up much better than others.
But among the most stable places in the current downturn are college towns.
Using data from the Bureau of Labor Statistics for March 2009, Martin Prosperity Institute researcher Patrick Adler put together the following graph which plots the unemployment rate for various states, major commercial cities, and college towns. The results speak for themselves.
May 21st, 2009 at 1:45 pm
Aren’t college towns more stable due to the relative stability of cash flow to its residents in the form of student loans?
Also, given the demise of the auto industry in Detroit (what is left of it located within the city boundaries), what is left of the city isn’t much more than a college town for Wayne State U.
Why is Oregon missing a Big City? Strange to have 2 college towns with 2 very different unemployment rates… especially given that
Eugene’s unemployment rate is higher than Detroit’s (remarkable). Mis-colouration?
May 21st, 2009 at 3:40 pm
There is a direct link between higher educational attainment and lower unemployment rates. Often, college towns have a much higher rate of educational attainment in their workforce, making them naturally unemployment-resistant. I wrote about something similar late last year on our Chamber’s Research Blog:
http://research.commercelexington.com/?p=5
May 21st, 2009 at 4:01 pm
Does that study control for the presence of higher educated workforce at the universities themselves?
Furthermore, what is the median difference between a college down and a big city town in the chart above? From eyeballing it, I would imagine it is less than 2%, which wouldn’t appear to be terribly compelling.
May 21st, 2009 at 4:10 pm
Furthermore, college towns have a higher rate of educational attainment because they are, generally, tending towards single industry towns… and that industry is education. I’m sure they might also have a higher than average rate of binge drinking and college age students. I mean, those big cities may have just as many, if not more, highly educated people living there, but do not benefit from the statistical advantage gained from a mono-industry economy. So, while interesting, I’m not sure I place much value on these findings, nor do I really think much can be gleaned from them.
May 21st, 2009 at 7:48 pm
I would like to see the differences highlighted above as well.
I disagree with your other assertion, however. At least in Lexington, though the University of Kentucky is our single largest employer at around 10,000 employees, that only makes it around 7% of our total workforce and our county has the lowest unemployment in the state by far.
It isn’t the number of educated folks as much as it is the proportion. Sure NYC has more college educated folks than we do in Lexington, but I bet they don’t have 38% of their citizens with at least a bachelor’s degree like we do. College towns tend to shed a great deal of educated people yearly – it is only natural that a large number of them stick around.
May 22nd, 2009 at 8:29 am
From your description, and from a little googling on my part (to offset my near total ignorance of the specifics of Lexington), it doesn’t sound to me like Lexington is a “college town”. Not when compared to other clearly college towns like State College, PA (which is, essentially, a single industry town).
I didn’t see the full report on the website linked in this posting, so I have no idea how they defined “college town”. However, I wouldn’t think that Lexington would meet the wikipedia definition (lazy me) of: A college town or university town is a community (often literally a town, but possibly a small or medium sized city, or in some cases a neighborhood or a district of a city) which is dominated by its university population.
All of this isn’t to say that I disagree with the claim that college towns survive recessions better. I think they very clearly would… but I go back to my earlier belief that it is in no small part due to the incredible volume of cash flowing into these towns by way of student loans. And even where there are differences, from the chart above, by and large the differences were not significant.
May 26th, 2009 at 9:45 am
Fair enough. I think we can both agree that the effect that a major college or university has on a city is almost always overwhelmingly positive on many fronts – employment just being one of many.