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Uneven Opportunity: Variation in Employers' Educational Preferences for Middle-Skills Jobs
To ensure more low- and moderate income families can enjoy pathways into prosperity, it is crucial to identify the economic opportunities available to non-college-educated or middle-skill workers. To this end, in a recently published paper, Uneven Opportunity: Exploring Employers' Educational Preferences for Middle-Skills Jobs, researchers from the Federal Reserve Banks of Atlanta and Philadelphia explore why employer preferences for bachelor's degrees for the most prevalent opportunity occupations vary significantly between metropolitan areas.
Opportunity occupations are jobs that pay more than the national median annual wage, as adjusted by local cost of living, and are generally accessible to workers without a college degree. As such, they provide crucial opportunities for middle-skill workers to enter the middle class. The research answers two questions:
- What characteristics of metropolitan areas are related to employer requirements for college degrees to access select professions?
- For the four most common opportunity occupations—computer user support specialists, registered nurses, first-line supervisors of retail sales, and executive secretaries—what are the trends in college degree requirements?
A key highlight of the research findings: employers in metro areas with a higher share of recent college graduates in the local labor force, a larger population, higher wages, or those located in the Northeast (as compared to the South1) are more likely than others to request a bachelor's degree for these opportunity occupations. As a result, these jobs are less accessible to middle-skill or non-college-educated workers living in these metro areas, and they thus enjoy more limited economic opportunity.
Place matters for middle-skill economic opportunity
Where workers live has a significant impact on the availability and accessibility of well-paying jobs that do not require a bachelor's degree. The paper specifically analyzes four of the most prevalent opportunity occupations in the United States. These included computer user support specialists (almost 335,000 job ads), registered nurses (1.4 million job ads), first-line supervisors of retail sales (some 645,000 job ads), and executive secretaries (just short of 120,000 job ads). In chart 1, each bar represents one metro area in 2014. As the chart demonstrates, there is substantial variation across metropolitan areas in the share of job ads that require a bachelor's degree for each of these occupations. In 2014, just 8 percent of job ads for registered nurses in Altoona, Pennsylvania, required a bachelor's degree, while 71 percent of ads in Hinesville-Fort Stewart, Georgia, required the same level of education. Additionally, while just 4 percent of ads required a college degree for retail sales supervisor positions in Pascagoula, Mississippi, 73 percent did so in Fayetteville, Arkansas.
Based on an analysis of all online job ads for these positions placed between 2011 and 2014, and controlling for the characteristics of jobs, such as required experience or skills, the authors found several factors influenced employers to require a bachelor's degree. For instance, employers in metro areas with a larger share of recent college graduates in the labor force were more likely to demand a bachelor's degree. Similar results were found for employers in areas with higher wages, or larger population sizes, or those operating in the Northeast and Midwest as compared to the South.
Across these findings, similar trends exist for these jobs, but there are important differences. For example, over time, employers are increasingly requiring bachelor's degrees for registered nurse positions. In 2012, employers were 5 percent more likely to demand a college degree for these jobs than they were in 2011. In 2014, employers were 7.9 percent more likely to do so, compared to 2011. That means that a current opportunity occupation, registered nurses, is becoming increasingly hard to access for middle-skilled workers. However, the other selected occupations show a diverging trend. Employers were 1.1 percent less likely to require a four-year degree for computer user support specialist positions in 2014 as compared to 2011, and were 3 percent less likely to do so for retail sales supervisors.
The share of recent college graduates in the metro area's labor force also had an impact on the educational requirements for these occupations. For computer user support specialists, employers that were located in areas where this share was in the top quartile were 5.6 percent more likely to require a bachelor's degree than those located in metros where this share was in the bottom quartile. For registered nurse positions, employers were 2.2 percent more likely to require a four-year degree, and for executive secretaries this was 11 percent. The share of recent college graduates appeared to have the least impact for educational requirements for retail sales supervisor positions.
Other notable factors that influenced college degree requirements for these opportunity occupations included wage and population levels. Both had a positive relationship with stricter bachelor's degree requirements for all occupations. Notably and arguably surprisingly variables like the unemployment rate and the share of foreign-born residents were not found to have an effect. Finally, after controlling for all other variables, employers located in the Northeast were significantly more likely to demand a bachelor's degree for all selected occupations. For instance, as compared to the South, employers located in the Northeast were 4.2 percent more likely to demand a four-year degree for computer user support specialists, and 4.8 percent more likely to do so for executive secretaries. This regional effect was strongest for registered nurse positions, for which employers were 8.9 percent more likely to require a bachelor's degree.
Metro area variation in educational requirements
The report additionally compares the specific differences in the likelihood of bachelor's degree requirements in 59 metro areas.2 Using Atlanta as a baseline, the results show significant variation in college education requirements for these opportunity occupations (see chart 2). Generally, employers in metro areas in the Southeast have less stringent educational requirements for these four opportunity occupations than do those located in Northeast or western cities. One exception here is that employers in the West are 3.3 percent less likely to require a bachelor's degree for computer user support specialist positions.
Registered nurse positions see a particularly high variation. For instance, employers in Colorado Springs, Colorado, are 22 percent more likely to require a bachelor's degree for this occupation than those in Atlanta, and those in New York City and Portland, Oregon, are 18 percent more likely to do so. In contrast, employers in various other southeastern metro areas are much less likely to require a college degree. For instance, employers in Miami are 9 percent less likely to require a bachelor's degree, those in Nashville 14 percent less likely to do so, and those in Huntsville, Alabama, 17 percent less likely to require one.
Variation was similarly large for the computer user support specialist and retail supervisor occupations. For instance, for the former, employers in Huntsville were 19 percent less likely to require a bachelor's degree, whereas those located in Bridgeport, Connecticut, were 11 percent more likely to do so. Retail supervisor jobs showed fewer differences between metro areas across the country. Additionally, Atlanta had a relatively low rate of bachelor's degree requirements for this position. Still, employers in Seattle, Washington, and San Jose, California, were 21 percent and 19 percent, respectively, more likely to require a four-year degree for these jobs. In contrast, executive secretaries showed relatively little variation in educational requirements across these metro areas, with the exception of employers in some western and northeastern metro areas like San Jose, Seattle, and New York City having significantly more stringent educational requirements.
Pathways for middle-skill workers
The research on opportunity occupations provides a better understanding of the options non-college-educated workers have to enjoy economic mobility. It further illustrates where these opportunities are, and how these vary across major metropolitan areas. It appears workers living in lower wage, less populated areas with a smaller share of recent college graduates in the workforce tend to have better access to the most prevalent well-paying jobs that don't require a college degree. Additionally, workers in metro areas in the South tend to have better access to such jobs than do their counterparts in the Northeast or the West of the country.
For more information on this important topic, read the 2015 report by researchers from the Federal Reserve Banks of Atlanta, Cleveland, and Philadelphia, which originally explored the phenomenon of opportunity occupations and mapped their distribution in 100 metropolitan statistical areas across the country. A forthcoming report by researchers in the Community and Economic Development Department at the Federal Reserve Bank of Atlanta will provide greater detail on the nature and prevalence of opportunity occupations across the Southeast. The report examines the types, numbers, and openings of well-paying jobs for middle-skill workers for each state and metro area of the Federal Reserve's Sixth District.3 It will reveal differences in the degrees of economic opportunity available to non-college-educated workers across the region. This report is expected to be published in the first quarter of 2017, so stay tuned.
By Mels de Zeeuw, Atlanta Fed CED Research Analyst II
1 The South is used as a baseline due to the nature of the statistical model. The regions conform to U.S. Census Bureau definitions.
2 The model controls for the level of experience, the year the ad was placed, the number and types of skills listed in the ad, as well as whether the ad was published by a recruiter or by the firm itself.
3 The Sixth District consists of Alabama, Florida, Georgia, and parts of Louisiana, Mississippi, and Tennessee.