As the economic recovery has slowed and the national unemployment rate has remained stubbornly stuck about 8% the economic conversation has turned to discussions of skills and education gaps, in other words the gulfs between what job openings require and what job applicants have.
While economists, legislators, business leaders, and educators have been looking at ways to close the skills gap for years, the education gap has largely gone unaddressed. However, the gap between the education requirements for job openings and the education job applicants have attained can weaken local economies, reports a new study from the Brookings Institute.
By analyzing six years of job-market data for the 100 largest metropolitan statistical areas in the U.S., the study’s author—Jonathan Rothwell, a Senior Research Associate and Associate Fellow at the Brookings Institution’s Metropolitan Policy Program—found that 43% of job openings typically require at least a bachelor’s degree, but nationwide only 32% of adults over the age of 25 have a bachelor’s degree.
Rothwell’s analysis also found that metro areas with a large education gap have a consistently higher unemployment rate, by as much as two percentage points, than areas with a low education gap and an area with a high education gap experiences lower rates of job creation and entrepreneurship. The study also found that, while the education gap is a structural element of the economy, the educational requirements for jobs vary greatly across the nation—with 56% of jobs in the San Jose, Calif. area requiring a bachelor’s degree as opposed to only 29% in Fort Meyers, Fla.
While the educational requirement differences and the size of the education gap vary from city, they remain fairly consistent at a regional level. Of the 10 metropolitan areas with the highest demand for workers with a post-secondary education four are in New England states, whereas four of the metropolitan areas with the lowest demand for employees with a bachelor’s degree are in the South.
Although metropolitan areas with the smallest education gap are fairly evenly spread out across the country—with two in New England, two in the South, two in the West, two in the Midwest, one in the Pacific, and one in the Mid-Atlantic—the areas with the largest education gaps are evenly split between only two areas, the South and California.
The large education gap and low educational demands for jobs in the South confirms a study published by Georgetown University in early August that found that the South was a decade behind in jobs requiring postsecondary education, which creates a low wage/low skill equilibria that depresses wages and discourages the creation of high skill/high pay jobs.
Paradoxically, Rothwell’s research finds that three of the five southern metropolitan areas—Houston, El Paso, Augusta, Ga., Lakeland, Fla., and McAllen, Texas—with the highest education gap had some of the highest job creation numbers. Over the six year survey period, 2006 to 2012, McAllen had the highest job growth rate, 5.5%, of any of the metro areas with either the smallest or the largest education gaps.
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