Human Capital Growth in a Cross Section of U.S. Metropolitan Areas

Human capital growth, defined as the change in the fraction of a metropolitan area's labor force with a bachelor's degree, is typically viewed as generating a number of desirable outcomes, including economic growth. Yet, in spite of its importance, few empirical studies have explored why some economies accumulate more human capital than others. This paper attempts to do so using a sample of more than 200 metropolitan areas in the United States over the years 1980, 1990, and 2000. The results reveal two consistently significant correlates of human capital growth: population and the existing stock of college-educated labor. Given that population growth and human capital growth are both positively associated with education, these results suggest that the geographic distributions of population and human capital should have become more concentrated in recent decades. That is, larger, more-educated metropolitan areas should have exhibited the fastest rates of increase in both population and education and thus 'pulled away' from smaller, less-education metropolitan areas. The evidence largely supports this conclusion.