THERE’S been some discussion in Maine about the need to increase educational attainment of the state’s workforce to boost job growth. While such discussions garner support, and the notion that Maine’s job growth would accelerate with a more educated workforce, there are some questions about the efficacy of education as an engine for economic growth.
A new report brief out of Cleveland State University’s Center for Population Dynamics looks at the growth of workers with advanced degrees in the nation’s metro areas. The report is part of a larger study that examines the relationship between advanced degree attainment and economic growth. As the study notes:
Specifically, a region’s highest-educated workers are likely to be job creators, not just job consumers. This primarily comes about two ways: (1) through direct job creation, such as a research doctor starting a biotech spin-off firm; and (2) through indirect job creation, particularly relating to “downstream” effect a high-paying job has on the local service economy. Put more simply, more income, more spending, equals more jobs.
While the authors will release a paper expanding on their findings later this year examining the educational attainment-economic growth relationship, they did note in the report brief the following:
Now, in the case of Cleveland, do the result meant he gritty Rust Belt metro is experiencing robust job growth? Not exactly . . . In other words, while the region’s highest-skilled workforce is converging into the ranks of the national elite, the effect has yet to be found “downstream” in direct or indirect job creation.
Why? This will be expanded upon in the coming paper, but the brief suggests that:
[C]oncentration of advanced-degree workers is an important leading indicator to more widespread growth.
This is particularly true with regards to regions with evolving economies; such as Cleveland’s and other Rust Belt cities that have experienced a shift from manufacturing based economies to more knowledge based economies. Although the brief does not delve into the reasons why, presumably this is because a region’s economy does not shift overnight, and instead likely takes years to completely transform. In other words, there is some lag between the stimulation of demand for workers with advanced degrees, and the economic growth resulting from the concentration of those workers with advanced degrees.
Lastly, as noted in another CSU report brief on the same topic, is that demand for these advanced degrees is a pre-requisite for the concentration of those workers. Simply increasing the supply without the demand is insufficient.
In the wake of recent mill closures and the continuing shift in the state’s economy, the above has important implications for Maine’s economic future. Specifically, notions that economic growth naturally flows from the increase in educational attainment of a workforce is flawed. While educational attainment is a factor to economic growth, it is just that, a factor, not the factor. Demand for college and advanced degrees is necessary or else the increased supply of college and advanced degrees in the state will be a bust for the state’s economy, and currently there is little evidence of demand.