Do Colleges and Universities Increase Their Region’s Human Capital?

TO follow up two previous posts regarding job growth and educational attainment.  Succinctly, increasing the educational attainment of a workforce alone will not boost job growth unless there is adequate demand for labor is there.  To reinforce that, the following is the abstract from a 2011 paper authored by Jaison Abel and Richard Deitz (my emphasis):

We investigate whether the degree production and research and development (R&D) activities of colleges and universities are related to the amount and types of human capital present in the metropolitan areas where the institutions are located. Our results indicate only a small positive relationship exists between a metropolitan area’s production and stock of human capital, suggesting that migration plays an important role in the geographic distribution of human capital. We also find that academic R&D activities increase local human capital levels, suggesting that spillovers from such activities can raise the demand for human capital. Consistent with these results, we show that metropolitan areas with more higher education activity tend to have a larger share of workers in high human capital occupations. Thus, this research indicates that colleges and universities can raise local human capital levels by increasing both the supply of and demand for skill.

The obvious issue is whether in Maine there is currently adequate demand.  In short, my argument is that the evidence doesn’t support that conclusion.



John Haskell

About John Haskell

John graduated from the University of Southern Maine with a degree in Political Science, and from the University of Maine School of Law. He has worked in both the public and private sectors, and currently, works with a small business services company in the Mid-Coast area.