Human Capital and Jobs Session Summary

Moderator: Steven Shepelwich, Federal Reserve Bank of Kansas City
Discussant: Aaron R. Fichtner, New Jersey Department of Labor and Workforce Development

"We Got More Educated, We Are Better Off...Right?"
Stuart Andreason, University of Pennsylvania

"Job Creation for the Disadvantaged: A Review of State and Local Efforts"
Karen Chapple (presenter), University of California–Berkeley and Bob Giloth, Annie E. Casey Foundation

"The Impact of Bus Transit on Employee Turnover: Evidence from Quasi-Experimental Samples"
Dagney Faulk (presenter) and Michael Hicks, Ball State University

Understanding the labor market is crucial to understanding what is happening in low- and moderate-income communities. The panel on human capital and jobs examined several aspects, including the effectiveness of talent attraction and retention policies to improve the local economy. The panel maintained that increasing bachelor's degree (BA) attainment does not always lead to better outcomes for the entire labor market, or perhaps more importantly, low-skill workers. Panelists also discussed challenges faced by cities and/or states as they design low-cost jobs programs. Readily implementable strategies to create new jobs for low-skilled workers, such as the provision of fixed-route bus transit connecting people to jobs, led to extensive discussion.

Stuart Andreason of the University of Pennsylvania identified the geography of regional change in BA attainment between 1990 and 2010. His paper shows that many regions that increase BA attainment see little or no attendant improvement in labor market indicators. Andreason also catalogs demographic and economic conditions associated with growth in BA attainment. This research finds that at the individual level a bachelor's degree means increased life opportunity almost universally, but regionally that does not seem to be the case. Therefore, he argues that at the policy level, talent attraction and retention programs should be formed in conjunction with strategies that reduce residential segregation, improve enrollment in postsecondary programs, and create job opportunities for middle- and low-skill workers.

Karen Chapple of the University of California–Berkeley discussed current job creation practices of cities and/or states, using a survey of state and local economic development programs in all 50 states, plus in-depth case studies of model programs. She identified a variety of approaches beyond business attraction, including policies that focus on endogenous development, import substitution, and job quality. She finds that sector- or place-based approaches are likely more effective at creating jobs for the disadvantaged. The paper offers recommendations for how communities, municipalities, and states might best scale up their job creation efforts for their most disadvantaged residents. Recommendations range from tapping new economic resources for business development to strengthening small businesses and microenterprises to developing strong job access programs with public and private partners.

Dagney Faulk of Ball State University spoke on the relationship between fixed-route bus transit and employee turnover. Using county-level data from Illinois, Indiana, Michigan, Ohio, Pennsylvania, and Wisconsin, the paper finds that the size of the fixed-route bus system is negatively related to employee turnover rates, and an increase in bus systems' per capita operating expenditures is associated with a decrease in employee turnover. The results suggest that access to fixed-route bus transit should be a component of the economic development strategy for low-income communities not only for the access to jobs that transit provides low-income workers, but also for the benefits to businesses that hire these workers.