A point made in a recent post on return on investment in higher education, with detailed data from Colorado, deserves more focused attention and more consideration of its political implications.
Facts
Let's start with some observations about the Colorado data:
1. All of the private sector post-secondary programs in Colorado, both for profit and non-profit, are in urban areas with relatively healthy economies.
In the case of associate's degree and certificate programs which are usually pursued on a non-residential basis (often while holding down a job as well) and private sector bachelor's degree programs catering significantly to non-traditional students and/or students commuting from home, this is very likely a product of market forces at work that make such programs less viable in rural areas and less economically health urban areas.
In the case of private non-profit bachelor's degree programs that primarily serve traditional students who live on or near campus, however, this is probably just a matter of a small sample size (Colorado has only six private non-profit bachelor's degree programs, and only three predominantly serve traditional students who live on or near campus), as there are many such programs in other states (see, e.g., Oberlin, Kenyon, Williams, Colby, Amherst, and Smith).
2. All of the associate's degree and certificate programs that produced a positive return on investment for students were in urban areas with relatively healthy economies.
3. Only one public sector associate's degree and certificate program in an urban area with a relatively healthy economy (Community College of Denver) did not produce a return on investment in less than ten years.
4. All of the associate's degree and certificate programs in areas that were rural or had less healthy economies did not produce a return on investment in less than fifteen years.
5. While all eleven public bachelor's degree programs produced a return on investment in less than ten years, the three of the five with the slowest return on investment (Western Colorado University, Colorado State University-Pueblo, and Fort Lewis College) are in places that are rural or had less healthy economies. (Metropolitan State University in Denver, and Colorado Mesa University in Grand Junction were the other two).
Outliers Considered
Colorado Mesa University (where my wife formerly worked as an instructor and then as an administrator) is serving a lot of people in rural and economically depressed parts of Colorado, who often return to those places and is easy to be admitted to compared to many our bachelor's degree granting institutions in Colorado, even though Grand Junction itself, where it is located is fairly urban and fairly economically healthy as a regional center for the Western Slope.
Some of the poor outcomes at the Community College of Denver and Metropolitan State University reflect a deliberately stratified higher educational system in metropolitan Denver. Elsewhere in the state, CU-Denver, Metropolitan State University, and Community College of Denver, which share a campus (and likely some suburban community colleges as well) would have been merged in a single institution with their outcomes blended. In Denver, not too surprisingly, the institutions with the most generous admissions policies have the lowest outcomes, and those with more selective admissions have better outcomes in this more stratified system.
Technical Analysis And Caveats
All of this analysis comes with the caveat, however, that a significant factor in differences in return on investment from education flows from a couple technical point about the analysis.
The study is using state level incomes for high school graduates as a baseline to value return on educational investment, but high school graduates make more in urban areas with healthy economies than they do in rural areas and areas with less healthy economies. So, return is inflated in areas that are urban and have healthy economies because more fine grained high school graduate income isn't used, and deflated in areas that are rural or have less healthy economies, where an associate's degree or certificate may still have returns relative to local incomes without that additional education, but which are still low due to the local economy.
The other technical issue is that returns aren't purchasing power adjusted. Living in urban areas with healthy economies is expensive, so while having a post-secondary education and working in those areas produces a much higher nominal income, that doesn't necessarily translate into a higher standard of living in places like Denver, Boulder, Colorado Springs, and mountain resort towns in Colorado where the cost of housing, in particular, is very high relative to rural Colorado and less economically healthy urban areas like Pueblo.
Conclusions
One fair interpretation of these facts is that while higher education has a great return in urban areas with healthy economies, education imparts less economic value in places that are rural or have less healthy economies that don't have a good way to use the capabilities that post-secondary education fosters.
This is more notable in associate's degree and certificate programs which provide smaller gains in earning capacity in absolute terms than bachelor's degree programs, even if they are comparatively inexpensive to complete. Also, students in associate's degree and certificate programs are more likely to remain close to the school that they attend when they finish the program.
The pattern observed in Colorado is probably far more widespread and typical of the nation as a whole.
Since education is less beneficial in areas that are rural or have weak economies, it isn't too surprising that political support for higher education is also weaker in these areas.
This helps explain the Red State-Blue State divide in education, which while experienced as heavily cultural and part of a larger alienation from academia, science and government in political red communities, could be a source of the different cultural attitudes.
The lack of good economic returns to educational investments may also partially explain lower graduation rates in many of these programs in these areas, since finishing a program is less likely to make much of an economic difference that is worth the effort of sticking to it.
The information discussed so far doesn't address the question, but there is other data and a literature out there that suggests that (particularly after adjusting for cost of living), there is a strong return for more educated people who move to urban areas with hot economies, but that there is little or no return for people without post-secondary education of any kind to moving to urban areas with hot economies.
The differential return on education associated with moving to urban areas is probably a factor increasingly sorting the United States geographically into red and blue leaning areas.
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