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DEGREES OF SEPARATION: New Report Finds Better-Educated Individuals—and Cities—Were Less Impacted by the Great Recession

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“The smaller impacts of the recession on college-educated workers in these metro areas may thus have insulated their less-educated workers from more severe employment declines.”

When the full impact of an economic downturn is measured, individuals with higher levels of education have consistently fared better during economic recessions, including the “Great Recession” that lasted from December 2007 to June 2009, according to a new report from the Brookings Institution. However, the report, Degrees of Separation: Education, Employment, and the Great Recession in Metropolitan America, also finds that the relationship between education and changes in employment has not been uniform across the country.

The report uses data from the Census Bureau’s American Community Survey (ACS) to analyze employment between 2007 and 2009 for adults with different levels of education in America’s one hundred largest metropolitan areas, which account for two thirds of the nation’s workers and three quarters of its gross domestic product. Specifically, it focuses on the ratio of the number of people in jobs to the total population, or the employment-to-population ratio.

According to the report, the Great Recession affected the 30 percent of workers near the top of the educational attainment spectrum much less severely than others. It notes that while the employment-to-population ratio for groups without a four-year college degree fell between 2 and 3 percentage points from 2007 to 2009, the ratio for college-educated workers dipped by only 0.5 percent. Put simply, as the total number of working-age adults with college degrees increased over the two-year period, the number of employed individuals in the group rose at a similar rate. The same was not true among individuals with only a high school diploma or among individuals with some college or an associate’s degree.

It is not surprising to hear that individuals with more education were better able to withstand the Great Recession, but the report also finds that metro areas with more highly educated populations also weathered the recession better than other metro areas. In fact, among the twenty largest metro areas with the highest shares of individuals with college degrees, only four—Bridgeport, Chicago, Raleigh, and San Diego—experienced overall declines in their employment-to-population ratios that exceeded the national average of 1.6 percentage points.

Even lesser-educated workers seemed to benefit by living in highly educated metro areas. According to the report, only 15 percent of the twenty highest-educated metro areas registered a significant decline in the employment-to-population ratio for adults without a high school diploma, compared to 40 percent of the remaining eighty metro areas.

“It may be that these workers complement highly skilled labor in the production of specific goods and services, or that high-skilled workers consume goods and services that disproportionately employ lower-skilled labor (e.g., household cleaning, restaurants, etc.),” the report reads. “The smaller impacts of the recession on college-educated workers in these metro areas may thus have insulated their less-educated workers from more severe employment declines.”

Degrees of Separation also finds that while there was some geographic overlap between the locations where the least- and most-educated workers were affected by the Great Recession, there were notable differences. In general, workers without a high school diploma were most severely affected in Sun Belt housing-bubble markets such as Cape Coral, Orlando, and Phoenix, as well as older industrial metro areas in the Northeast and Midwest. However, none of the ten most-affected metro areas for workers without a high school diploma registered a statistically significant drop in employment among the college-educated. Meanwhile, of the thirteen largest metro areas that posted at least a modest decline for workers with a college degree, only five also saw unemployment levels drop among workers without a high school diploma.

“The Great Recession has struck broadly, but not evenly,” said Brookings Senior Fellow Alan Berube, coauthor of the report. “Highly educated workers, and the metro areas with the highest concentrations of those workers, have suffered fewer job losses on average. These data also remind us that our efforts to help unemployed workers cannot be one-size-fits-all. It’s important to have the flexibility to respond to differences in labor markets.”

The report notes that national and state policies to help workers “get back on their feet” must permit local and regional officials to tailor their responses to the particular groups most impacted by the downturn. It suggests that policies might reasonably prioritize assistance to displaced workers with lower levels of education, who may have a smaller economic cushion and more limited job opportunities for the future. At the same time, however, workers with higher levels of education and skills—even those with a college education in some cases—may need special assistance and guidance to reintegrate into the labor market in regions where they have borne the brunt of the downturn.

Degrees of Separation is available at http://bit.ly/adOQyD. The report includes a table with the percentage point change in employment-to-population ratio by education attainment for the one hundred largest metro areas in the United States from 2007 to 2009.

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