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When It Comes to Skills and Talent, Size Matters

Bigger metros are drawing a larger share of higher-skill workers, especially in industries that require more education.
A businessman checks his phone in Charlotte, North Carolina.
A businessman checks his phone in Charlotte, North Carolina. Carlos Barria/Reuters

America is not only becoming economically unequal, it is becoming more geographically unequal as well. Large superstar cities like New York and Los Angeles have outsized concentrations of finance, media, entertainment, and creative industries, while knowledge and tech hubs like San Francisco, Boston, Washington, D.C., and Seattle have outsize concentrations of talent, technology, and knowledge industries. Just 20 metros of 360-plus metros across the country have fully formed knowledge and creative economies, as new kind of winner-take-all urbanism defines our economic landscape.

But what lies behind this new and increasingly unequal geography? A new study on NBER on “The Comparative Advantage of Cities” by economists at Columbia University and the University of Chicago takes a deep dive into this issue. The study looks closely at the distribution of talent and skill across the U.S. metros. It focuses on two measures of skill—one based on level of education and the other based on the occupation and kind of work people do. While most economists have typically measured skill or human capital by educational attainment, I have long argued that occupation provides a more refined measure of actual relevant workplace skill. The study examines the distribution of skill across 270 metros across 9 levels of education and 22 occupational categories (such as Computer & Mathematical, Community & Social Services, or Cleaning & Maintenance) across 19 separate industries—for example, educational services, health care and social assistance, or manufacturing.

Educated people gravitate to bigger cities and metros