A Matter of Degrees: The Effect of Educational Attainment on Regional Economic Prosperity

Feb 27, 2013
Publisher: Milken Institute

For America's communities, the returns to investment from higher education have never been greater. While it's intuitive that an educated population, good jobs, and prosperity go hand-in-hand, this study proves the strong relationship between education and a region's economic performance. Institute economists created a unique data set linking educational attainment and occupational trends over time and by region. The report and the accompanying data site not only provide a blueprint for policy makers and leaders to boost education: they can help career seekers figure out where they can get the most bang from their educational buck.

Key findings of the study include:

  • Education increases regional prosperity. Adding one year to the average years of schooling among the employed in a metropolitan area is associated with an increase of real GDP per capita of more than ten percent, and an increase in real wages per worker of more than eight percent.
  • Better educated = bigger benefits. The better educated the worker, the greater the benefit of additional schooling, to both the worker and the region. Add one year of college to a region's workforce, for instance, and GDP per capita jumps 17.4 percent.
  • Clusters count. In metros with clusters of high-skilled occupations, the share of workers holding at least a master's degree is much higher than in metros without significant clusters, perhaps because of the intense competition for employment.