Wednesday, August 04, 2010

Rethinking Talent Dividend

Hot on the heels of Richard Florida's noodling concerning the concentration of the college educated in the United States, Bill Testa and the Chicago Fed offer up a more nuanced analysis. A clear distinction is made between where the brains live and where they work. Why we care where talent lives:

The choice of residential location by those adults who are college-educated also has important consequences for central cities because such households generally contribute heavily in their payment of local taxes. Older cities of the Northeast and Midwest often have a disproportionate amount of low-income households for whom public services such as education must be financed through local taxes. Having more highly educated, high-income households living in the city boosts the local tax base, providing more revenue for local governments to provide these vital public services.

Residential patterns are much more diffuse than the place of work. In the Pittsburgh metro area, household sprawl is infamous. Conversely, high-skilled jobs are remarkably dense in the urban core. A snapshot:

Many Rust Belt cities exhibit a similar residential geography. The variance in occupational location is much more interesting. Detroit's problems are stark when you compare it to Pittsburgh. The data are even more startling if you control for the area of each municipality covers.

Pittsburgh has one of the healthiest urban cores of any US city that relied heavily on manufacturing. Which brings me to the Talent Dividend campaign. I haven't seen any discussion of how to better concentrate college educated workers in the urban core. The focus is on raising regional educational attainment. Testa highlights why urbanists are evangelizing the program:

And as shown by various studies, where workers choose to live can affect where they choose to work—and vice versa. Accordingly, by attracting more highly educated (and other high-income) households, a city can draw in employers that are searching for available high-skill workers. Recognizing these incentives, many central city mayors have fashioned public amenities and services, such as parks, public art, and high-quality schools, to attract highly educated, high-income households in recent years.

Count the City of Pittsburgh among the converted. However, the mission was accomplished before people started moving downtown. That's some food for thought when the next round of policy discussions get going. Fait accompli before you get the people's money is quite the feat.

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