Johnson: College attainment and economic development: A big surpriseWritten by Dan Johnson | | firstname.lastname@example.org
Everyone knows that people with college degrees earn more, on average than people who have only completed high school. That’s why most people pursue a college education. No surprise here.
The differences in income for the different levels of educational attainment are, however, greater than most people think. For example, Americans with a four-year college degree earn — again, on average — $58,292 annually. Those with some college or a two-year degree average $38,220 and those with only a high school diploma earn $33,176 annually. Americans with less than a high school diploma earn $23,348 on average. Note the spread between those with college degrees and those with only some college; the difference is more than $20,000 annually … quite a difference!
For the past several months, CEOs for Cities, an organization based in Chicago, has been looking at the impact of educational attainment on local economies. One of the many findings, not surprisingly, is that cities with better educated populations have higher per capita incomes. In fact, using 2006 data from the nation’s largest metropolitan areas suggests that each additional percentage point improvement in aggregate adult four-year college attainment was associated with a $763 increase in annual regional per capita income. A little technical, yes, but important.
So let’s do the math for Toledo.
Toledo’s 2010 population was 287,208. The percent of Toledo’s adult population with a bachelor’s degree or higher was 17.4 percent. Increasing the number of Toledoans with a bachelor’s degree by one percent — to 18.4 — would increase the per capita income by $763 with an economic impact of $219,139,704. That’s the “big surprise!”
But here is an even bigger surprise: If Toledo would raise its college attainment just to the state level of 23.6 percent with Bachelor’s degrees the economic impact would be greater than $1 billion, actually $1,358,666,164.
These studies on the relationship between educational attainment and economic development are now attracting the attention of government and civic leaders all across the nation, including some of Ohio’s larger cities and regions. Youngstown and Northeast Ohio, Cincinnati, Columbus and Akron are among the nation’s 57 cities competing for the Talent Dividend Prize of $1 million to be awarded by CEOs for Cities to the city that exhibits the greatest increase in the number of post-secondary degrees granted per one thousand population over a three-year period. Funding for this very attractive award is being provided by The Kresge Foundation and the Lumina Foundation.
While it is too late for Toledo to join the competition for the million-dollar Talent Dividend Prize, it is not too late to realize the even greater reward of increasing the level of college attainment and its powerful impact on our local economy. Toledo and Northwest Ohio are perfectly positioned to successfully meet the challenge of raising the level of college attainment and reap the huge economic benefits from this success. With outstanding institutions of higher education within a few minutes drive of every citizen in the region, including the University of Toledo, Bowling Green State University, Lourdes University, Owens Community College and others, there is no good reason why Toledo and Northwest Ohio cannot raise their levels of college attainment by several points over the next few years.
A billion-dollar infusion into the region’s economy would not only bring direct economic benefits but would add other significant benefits including lower crime rates, increased civic engagement, small business development, lower rates of unemployment, lower rates of divorce, lower health and medical costs and numerous other benefits. It has also been shown that cities with higher levels of education not only have higher incomes but also faster rates of income growth.
One might ask how we can accomplish this very worthy goal of increasing the level of college attainment in our city and region. Four basic strategies are suggested by CEOs for Cities:
1. Encourage and assist high school students to go to college;
2. Retain current college students to completion of their degree;
3. Increase the percentage of students in two-year institutions that transfer to four-year institutions;
4. Make it possible for and encourage adults with “some college” to return to complete their college degree.
Adopting these strategies in a serious manner will increase the educational attainment of Toledo and the region. This increase will, in turn, raise the level of personal income. This increase in personal income will have a huge, measurable impact on the economy of Northwest Ohio.
There is no longer any doubt about the relationship between college attainment and economic development. The education of a city’s population is the central factor in its ability to compete in the global, knowledge-driven economy.
Personally, I would like to see Toledo join the major cities across the nation in this project to raise the level of education and thereby spur economic development in such a way that all participants benefit. Can we not take on this challenge as part of our vision for the future of Toledo and Northwest Ohio?
Dan Johnson is director of global initiatives, president emeritus and distinguished university professor of public policy and economic development at the University of Toledo. Email him at email@example.com.