Social Returns to Education: Strengthening Rural Economies

Paul A. Lewin and Willem J. Braak – August 2015

In Social Returns to Education, Paul Lewin of the University of Idaho and consultant Willem Braak look at how education and the accumulation of human capital contribute to the well-being of rural communities.

They first explore how the rural-urban knowledge gap has changed over the last forty years, uncovering regional patterns in the concentration of high school dropouts and rural college graduates. They then examine the economic health of rural communities, highlighting high-wage industries with low average educational attainment and regions that attract college graduates. Finally, they look at how rural communities can use education to improve the health of their local economy.

Lewin and Braak find that educational attainment in the U.S. has increased significantly since the 1970s. The once-large high school attainment gap that existed between rural and urban America narrowed to five percentage points by 2010. However, in rural areas such as the Deep South and some pockets of Idaho and the Dakotas, the average share of adults without a high school diploma is higher than the national average.

The college attainment gap between urban and rural counties has increased. In 1970, just over 10 percent of urban students earned a college diploma, compared to five percent of the most rural students. By 2010, those numbers had increased to 30 percent for urban students and 15 percent for the most rural students.

Lewin and Braak use high school and college attainment to look the health of the economy in rural counties, using per-capita personal income as an indicator of productivity. They show that counties with a large share of educated workers have higher per capita income and that the inverse is true for counties with a large share of high school dropouts.

Lewin and Braak identify a number of counties that prove exceptions to these rules. Some rural counties with high per capita incomes benefit from valuable natural resource industries, such as oil and gas. Other rural counties are home to land-grant universities, which often serve as hubs for economic growth and diversification. Lewin and Braak suggest that the latter finding is an example that educational policies should be used as drivers of innovation.

Counties that position themselves to attract the “creative class”—innovators, entrepreneurs, and knowledge-based workers—are also an exception to this rule. Often, rural counties cannot compete with metro areas and the amenities available there. However, rural counties in recreational areas—which can be found in the high-educational attainment pockets cited above—have natural amenities which attract the creative class. Though these communities have struggled with problems such as preservation and industry diversification, they have also become home to national businesses and remote workers.

Of course, rural counties cannot alter their natural resources to attract educated workers. However, Lewin and Braak believe that they can implement polices to help attract human capital and boost their local economy. They offer Idaho’s Latah County—home to a land-grant university, one of the Pacific Northwest’s largest jazz festivals, and other cultural events—as an example of a community which invests in activities that generate income from visitors and help make it attractive to educated workers.

In addition to these recommendations for attracting the creative class, Lewin and Braak have several recommendations that incorporate education into rural growth strategies:

  • Create connections between education providers (secondary, post-secondary) and local industries.
  • Encourage lifelong learning programs that help workers keep their edge in a changing economy.
  • Decentralize some services and technologies to encourage innovation and support local economies.

Op-Ed in the Idaho Statesman