Degrees of Separation: Education, Employment and the Great Recession in Metropolitan America

Alan Berube
Alan Berube Interim Vice President and Director - Brookings Metro

November 5, 2010

Each of the economic downturns buffeting the United States in the last two decades has been greeted with claims by some that it is affecting professional, “white-collar” workers more severely than other workers, or than in past recessions.  When the full impact of these recessions is measured, however, those with higher levels of education have consistently done better than those with lower levels of education, including during the recent “Great Recession.”

Yet the recent relationship between education and changes in employment has not been uniform across the country. On one hand, as was true before the recession, people with more schooling are more likely to be employed than their less educated counterparts in every major metropolitan area. On the other hand, the regions in which workers without a high school diploma have suffered most from the recession are not the same as those in which workers with a bachelor’s degree have been most affected. Thus, regional changes in employment mask what are often significant differences in the recession’s impacts on workers with different levels of educational attainment.

An analysis of the share of people who are employed, by educational attainment, for working-age adults in the 100 largest metro areas in 2007 and 2009 reveals that:

During the Great Recession, employment dropped much less steeply among college-educated workers than other workers.  The employment-to-population ratio dropped by more than 2 percentage points from 2007 to 2009 for working-age adults without a bachelor’s degree, but fell by only half a percentage point for college-educated individuals.

Metro areas with highly educated populations experienced more modest declines in employment during the recession than other metro areas.  Among the 20 metro areas with the highest rates of bachelor’s degree attainment, only four registered declines in their overall employment-to-population ratio from 2007 to 2009 that exceeded the national average.  Additionally, employment for workers without a high school diploma was also less impacted in these highly educated metro areas than in other markets.

The metro areas in which less educated workers were most severely affected by the recession differed from those in which highly educated workers were most affected.  Workers without a high school diploma bore the brunt of the recession’s employment impacts in Sun Belt and manufacturing belt metro areas, while those with a college degree were more likely to experience small setbacks in large labor markets like New York, Los Angeles, and San Diego.  Several manufacturing-focused metro areas saw a “hollowing out” of employment opportunities during the recession, with employment levels dipping for workers with at least a high school diploma, but less than a bachelor’s degree.

Education appeared to act as a pretty good insurance policy for workers during the Great Recession.  But how workers fared also depended on the metropolitan labor market in which they were located.  That variation may reflect differences in the industries in which different educational groups worked, or in their ability and opportunity to deploy their skills in new ways as economic circumstances changed.  National and state policies to help displaced workers back into the labor market should provide regions flexibility to tailor their economic and workforce development responses to the specific groups most affected by the downturn.