The Power Of Power Couples

They give cities a competitive edge

Call them "power couples"--young or prime-aged married couples, in which each spouse is college-educated and career-oriented. Over the past 30 years, such couples have become a growing force in labor markets. And as a new National Bureau of Economic Research study by Dora L. Costa and Matthew E. Kahn suggests, their increasing inclination to settle down in large metropolitan areas may have important implications for the locational decisions of businesses and the growth of cities.

Several trends lie behind the advent of the power couple: the increasing labor-force participation of married women, rising demand and pay for well-educated workers, and the huge surge of women into college and once male-dominated professions. In 1940, only 18% of female college grads married to a college-educated spouse age 25 to 45 had jobs. By 1970, the share was 39%; by 1990, 74%. Meanwhile, the percent of marriages with two college grads rose eightfold from 2% in 1940 to 16% in 1990, and that of couples with one college grad tripled from 7% to 20%.

The tendency of working wives to defer to their husbands' job needs has also waned. The rise in women's relative wages, the high incidence of divorce, and the growth of feminist ideology have affected women's attitudes. The study notes that 49% of wives in dual-career households surveyed in 1998 classified their careers as equal in importance to those of their husbands.

The upshot has been a growing tendency of highly educated couples to locate in large cities, which offer more job opportunities for both husband and wife. The authors' analysis of Census Bureau data indicates that the share of college-educated couples living in large cities rose from 42% in 1970 to 49% in 1990 (chart)--and from 10% to 35% in the case of those with working wives.

By contrast, only 14% of college-educated couples with a nonworking wife resided in big cities in 1990, hardly more than the 13% of non-college-educated couples. While rents in large cities are higher than in smaller cities, the study finds that the higher wages paid to skilled workers in large cities plus the additional income from two paychecks more than offsets the rent difference (which makes smaller towns more attractive to one-worker couples).

Looking ahead, Costa and Kahn believe the tendency for power couples to locate in large metropolitan areas will intensify--a trend that is likely to affect business-location decisions. Already, surveys indicate that a spouse's employment has become a major reason that workers resist relocation. As a result, smaller cities--especially those lacking amenities such as a good climate--may have a hard time attracting and retaining skilled workers.

As for power couples, their relative economic position could actually improve as more of their peers join them in urban locales. In today's global, information-based economy, greater contact between highly skilled individuals in big cities seems to foster the kind of innovation and learning employers prize.