Clusters of smart people of the highly educated sort that economists refer to as “human capital” are the key engine of economic growth and development. The standard way economists measure this is to take the percentage of people in a country, state, or metropolitan area with a bachelor’s degree or higher. Jane Jacobs argued that the clustering of talented and energetic in cities is the fundamental driving force of economic development. In a classic essay, “On the Mechanics of Economic Development,” the Nobel prize-winning, University of Chicago economist Robert Lucas formalized Jacobs’ insights and argued that human capital, or what can be called Jane Jacobs externalities, are indeed the key factor in economic growth and development. Still most scholars measure human capital in terms of population, not in terms of its geographic concentration.
So I was intrigued by this fascinating analysis by Rob Pitingolo (h/t: Don Peck) which takes this question head on. To get at the issue of human capital clustering, Pitingolo compiled a neat measure of what he calls “educational attainment density.” Instead of measuring human capital or college degree holders as a function of population, he measures it as a function of land area – that is, as college degree holders per square mile. As he explains:
I compiled the data at two geographic levels: first at the city level and second at the “urban county” level. I realize that comparing these geographies is not always entirely fair. That’s why I’m giving away the spreadsheet with all of my work to anyone who wants to build upon this analysis (download it here). I picked these cities by looking at the 50 largest metro areas by population and pulling what I deemed to be the “primary city” from each. In two metro areas, the Twin Cities and Bay Area, I pulled two “primary cities.”
He goes through a variety of analyses in his post, which I highly recommend. But let me just show the results of his analysis of college degree density for the 50 largest cities.
San Francisco and New York are far and away the leaders in human capital density with 7,031 and 6,357 college degree holders per square mile, respectively. Boston (3,871), Washington, D.C. (3,395) , Seattle (2,853), and Chicago (2.543) all have human capital densities in the range of 2,500 to 3,500 degree holders per quarter mile. Silicon Valley has a human capital density of 1,259 degree holders per square mile. Also in this range and above the 1,000 threshold are Minneapolis (1,997), Providence (1,711), Philadelphia (1,664), Miami (1,633), L.A. (1,596), Oakland (1,596), Baltimore (1,336), St. Paul (1,293), Pittsburgh (1,289), San Jose (1,259) Portland (1,194), San Diego (1,071), Atlanta, (1,035) and Denver (1,023). Interestingly, noted, smart, high-tech clusters Austin and Raleigh are slightly below this level with 857 and 799 college degree holders per square mile, respectively. The lowest human capital densities are in Oklahoma City (159) and Jacksonville (167). Human capital densities of less than 500 degree holders per square mile are found in Birmingham (210), Louisville (250), Nashville (268), New Orleans (285), Kansas City (288), Memphis (313), Virginia Beach (370), Indianapolis (408), Detroit (425), Salt Lake City (445), Cleveland (453), San Antonio (469), and Phoenix (470). The median density in his data set is 792.
Pitingolo goes on to provide interesting analyses of human capital density at the county level, and also to conduct a residual analysis which enables him to identify places that are better or worse than expected on “predicted degree density. He raises an important question about the distribution of human capital within a metro region, calling attention to the issue of ”human capital sprawl.” As he defines, this occurs when human capital density is lower in the central city than its surrounding county. He finds preliminary evidence of this type of human capital sprawl in five places - Louisville, Jacksonville, Oklahoma City, Nashville, and Indianapolis – and notes that: “This preliminary result is particularly worrisome if you believe that metro areas need strong central cities and strong central cities need a lot of smart people.”