Creative-Class Counties and the Recovery

Rural counties with a large proportion of "creative-class" workers have tended to recover more quickly from the recession. But "amenity-rich" areas near national parks and other natural areas aren’t doing nearly as well, even though they boomed in the 1990s.

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Nonmetro counties that had a greater proportion of “creative class” workers tended to do better economically after the recession than other nonmetro counties, a new report says.

But they didn’t perform as well as metro areas overall – creative-class or otherwise –  according to the report from the USDA Economic Research Service.

The study also found that a strong performer in rural economics in the 1990s – creative-class, nonmetro counties with lots of natural amenities like national parks, forests and similar areas – did worse than the rest of nonmetro America in recovering from the Great Recession.

Creative-class counties are ones that have a large proportion of creative workers, such as engineers, architects, scientists, artists and others. The theory linking these kinds of workers with economic success is that people who perform such jobs are thought to be especially well suited to helping communities respond to economic change and opportunity.

ERS regional economist Tim Wojan, author of the study and previous work on the topic, points out that the creative-class economic theory was developed first to describe urban communities, not rural ones. The latest findings in Wojan’s research indicate that the creative class’ economic impact seems to behave differently in rural areas than it does in more populous regions.

The study compared the top 25% of counties with the highest share of creative-class employment to the rest of American counties. There are 785 creative-class counties nationally, including both urban and rural areas (a few were dropped from the study because of sampling-error issues). About half of metro counties were categorized as creative class (568 total), while only about 11% (217 total) of nonmetro counties were.

The study broke U.S. counties into four categories of economic performance:

  • Ones that lost jobs but regained employment after the recession.
  • Counties that lost jobs both during and after the recession.
  • Counties that gained jobs both during and after the recession.
  • And counties that performed the opposite of the rest of the economy by adding jobs during the recession and losing them after the recession ended.

The chart shows the results of the categorization.

The blue bar shows non-metro creative class counties; the red one, all other non-metro counties. There aren’t many surprises here. Metro counties tend to do better overall, as we’ve seen in other economic reports. But non-metro creative class counties have a slight advantage over other non-metro counties when it comes to jobs recovery.

But there is a bit of a surprise when Wojan looked at “amenity-rich” non-metro counties. These counties tended to perform well in the 1990s. But that wasn’t the case in the recovery from the Great Recession.

This chart shows that amenity-rich, creative-class counties weren’t as likely to be among counties that regained jobs after the recession ended. That’s reflected in the first set of bars. The first green bar shows that less than 40% of amenity-rich, creative-class counties regained jobs after the recession, while the tall, yellow bar shows about 70% of other nonmetro creative-class counties did so.

“For the amenity creative class counties, the added human capital endowment provided by workers engaged in skilled, creative activities does not appear to have hastened job growth in recovery,” Wojan writes.

So what’s going on with the amenity-rich counties?

Creative-class counties that don’t have big natural amenities may have performed better because they tend to be located closer to metro areas and may be part of metro “commuting sheds,” the study says. Counties that are rich in natural amenities, on the other hand, tend to be located farther from metro areas – think of Park County, Wyoming (with Yellowstone National Park) or Flathead County, Montana (Glacier National Park).

Another factor is that creative-class counties that were not amenity rich also were more likely to be college or university towns, which can provide some insulation from economic cycles, the study said.

One other idea, not mentioned in the study, is that the housing-industry collapse – the cause of the Great Recession – had a greater impact on amenity-rich areas. After all, these are counties that would tend to be attracting second-home owners, retirees and others with the money to purchase existing homes or build new ones.

We’ll be interested in learning whether further research confirms this theory.

 

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