Paul Lewin, Willem Braak – March 2015
Paul Lewin and Willem Braak, economists at the University of Idaho, paint a bleak picture of the state’s economic climate: per capita income has been deteriorating in Idaho since 1980 and is now one of the lowest in the nation. The state also leads the nation in minimum-wage workers, and its college graduates earn less than their counterparts in the rest of the United States.
In a new paper, Lewin and Braak attempt to understand what led the state to fall behind. They first look at how Idaho compares to the rest of the country in terms of the degrees earned and income, paying particular attention to differences between Boise and rural communities and between rural and non-rural segments of the U.S. Expanding on this analysis, Lewin and Braak consider how migration affects Idaho’s workforce, examining the educational attainment and earnings of those who leave, those who come, and those who stay. They also look at the state’s industry mix and describe how these sectors shape the state’s earnings potential.
Lewin and Braak found that Idaho’s educational attainment and industry mix have created a workforce with low earnings potential and little room for advancement, and with lower incomes in rural areas than in metro Boise. Key findings include:
- Only one of the largest sectors in Idaho, computers and electronic manufacturing, is considered high paying.
- Idaho is underrepresented in other high-paying sectors. Within those industries, employees have lower-than-average educational attainment and wages.
- While there is a slight in-migration of workers with a college degree, it is exceeded by the number of workers moving into the state who have a high school education or less.
- Idahoans with a high school degree are paid slightly better than non-natives, but locals with college or graduate degrees earn less than newcomers.
- Overall, the difference in degrees earned accounts for 17 percent of the earned-income gap between Idaho and the U.S.
The authors recommend that rural communities take an active role in improving their local economies, and propose several strategies, such as:
- Developing economic gardening plans that encourage talented youth to stay in the community or return after college
- Aligning high school training with local workforce needs
- Investing in public/private partnerships
Lewin and Braak believe that these investments in rural communities—bringing together schools and local employers, considering both the needs of current residents and the preferences of newcomers, and drawing on existing resources—will be necessary to improve the economic returns to education in Idaho.