A Middle Model of Economic Development? Revisiting the Economic Geography of Middle-Wage Occupations in the United States

Abstract

High-wage regions have frequently been models for economic development policy. However, these places have also been more likely to experience a “hollowing out” of the middle of the labor market, whereby college-educated residents experience high-wage growth, while residents without a college degree do not. This paper studies regions where—in contrast to hollowing out—the share of middle-wage jobs has grown since 1980. Its aim is to understand how—if at all—the characteristics of these regions could suggest a model of economic development that prioritizes opportunities for noncollege graduates. The authors find that regions with a growing share of middle-wage jobs have been associated with higher levels of upward mobility and wage growth for workers without a college degree. These places, such as Wausau, Wisconsin, and Manhattan, Kansas, are associated with higher local school performance and have experienced comparatively high growth in production jobs.

Keywords

inequality labor market polarization inclusive economic development social capital

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