A Reason for Higher Rural Unemployment: Education

One reason rural counties have shown consistently higher unemployment rates during this recession is education. Rural America has a lower percentage of BAs and that results in higher unemployment

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For the last two years the country has been in a recession and for most of those months, the rural unemployment rate has been higher than the unemployment rates in exurban or urban counties. (See chart on the next page.)

The rates in these three sets of counties run parallel. Unemployment in rural, urban and exurban counties rise and fall in unison. But the rural rate tends to be higher in most months.

What can explain this consistent difference?

Education, in part.

Unemployment drops as people get more education. The unemployment rate in January for those over 25 years of age with less than a high school education was 15.2%, according to the Bureau of Labor Statistics. For those with a bachelors degree or higher, however, the rate was 4.9%.

It makes sense, then, that unemployment would be higher where levels of education are lower. That’s exactly what this chart shows. And the relationship between education and employment is stronger in rural counties than it is in either urban or exurban communities.

The chart shows the difference in education levels between counties that had unemployment rates above the national average in 2009 and those that were below the national average.

The three bars on the left represent the urban, exurban and rural counties that had unemployment rates below 9.3%, the national average in 2009. The bars show the percentage of adults in those counties who have at least a B.A. degree.

In urban counties with low unemployment rates in 2009, for example, 32.9% of those over 25 years of age had B.A. degrees. In rural counties, 19.3% of those in low unemployment counties had B.A. degrees.

On the right, the three bars represent counties with unemployment in 2009 above the national average of 9.3%. As you can see, the percentage of adults in those counties who have at least a B.A. degree is considerably lower. In high unemployment rural counties, only 14.4% of the adult population has a B.A. degree, nearly 5 points less than in the low unemployment rural counties.

One of the reasons rural unemployment rates have been higher in this recession is that education levels in rural counties are lower. Below is a chart showing the percentage of adults (those over 25 years) in urban, exurban and rural counties who had at least a B.A. degree in 2009. You can see that the percentage of adults with a college degree or more in urban counties was nearly twice that of rural counties.

Roberto Gallardo/Economic Modeling Specialists, Inc.
One of the reasons unemployment rates in rural America have been higher than in the cities is that education levels are lower. This chart shows the percentage of adults in rural, exurban and urban counties who have at least a B.A. degree.

This analysis is similar to a study by Edward Glaeser for the New York Times blog Economix. Glaeser, a Harvard University economist, looked only at cities, however.

He found that, “Just as long-term urban success is tightly linked to a city’s skills, current economic distress is also highly correlated with an area’s education.” According to Glaeser, “there should be nothing surprising about this fact,” since skills have been known for some time to predict a region’s economic success.

Daily Yonder
Unemployment rates in rural America have been generally higher than the cities since the beginning of the recession.

We decided to find out if Glaeser’s equation (education equals economic success and lower unemployment in metro areas) held true for rural counties. It did, clearly.

According to our calculations, education levels were a more significant feature for rural counties’ rates of unemployment than for either urban or exurban counties.

The lesson of this recession is that education matters when it comes to jobs — and education matters most in rural counties.

 

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