The Prominence of Boston Area Colleges and Universities
McSweeney, Denis M., Marshall, Walter J., Monthly Labor Review
The Boston metropolitan area (1) is recognized by many for its concentration of prestigious private colleges and universities. The metropolitan area is home to 85 private colleges and universities employing 70,000 people and attracting more than 360,000 students from all over the world. This report uses employment and wage data from the Bureau of Labor Statistics (BLS) Quarterly Census of Employment and Wages (QCEW) program for the years 1990 and 2007 (2) to analyze the labor market impact and contribution of these institutions of higher education to the Boston area economy.
The analysis indicates a strong and steady growth in both wages and employment, with job creation in colleges and universities almost double the rate for total private employment. Wage gains also were higher for those working in colleges and universities than for those in overall private industry. The continuing growth of colleges and universities enhances the quality of the labor force and fuels knowledge-based industries, which are attracted by that quality.
Higher education employment
In 1990, there were almost 2,000 private colleges and universities in the United States, employing a total of almost 725,000 workers. (See table 1.) Massachusetts had 82 private colleges and universities, employing more than 69,000. Fifty-eight of those institutions (70.7 percent) were located in the Boston area, employing almost 58,000 workers.
By 2007, there were dramatic increases in the number of colleges and universities, as well as in their employment. In the United States, there were almost 4,400 private colleges and universities, employing an estimated 1,060,000 workers. Massachusetts colleges and universities had grown to 124, employing almost 85,000. Eighty-five (68.5 percent) of those institutions were in the Boston area, employing more than 70,000 workers.
Higher education job growth
In the Nation over the 17-year period from 1990 to 2007, overall job growth increased by 25.5 percent while the growth in college and university employment was 46.7 percent. Massachusetts employment gains in colleges and universities were almost double the overall percentage of growth in the private sector (22.2 percent, compared with 11.3 percent). While the Massachusetts economy added 288,000 jobs over the period, 5.4 percent of the total growth, or 15,400 jobs, were attributable to gains in higher education employment. The Boston area accounted for approximately 80 percent of the overall job gains in colleges and universities, with 12,000 jobs added over the 17-year period, for a growth rate of 20.9 percent, well above the overall increase of 12.9 percent for the metropolitan area.
Metropolitan area comparisons
Using a location quotient (3) comparison among the largest metropolitan areas in the Nation confirms the dominance and importance that higher education employment had in the Boston area over the 17-year period. In 1990, Boston ranked first among major metropolitan areas, with a location quotient of 3.92. Seventeen years later, the Boston area still ranked first, with a location quotient of 3.59. (See chart 1.) The Boston area location quotient indicates that college and university employment was approximately three-and-a-half times more concentrated, compared with the U.S. average, and shows that none of the other major metropolitan areas came close to matching the Boston area's concentration of employment in higher education.
The concentration of colleges and universities in both Massachusetts and the Boston metropolitan area has a positive impact on the quality of the labor force. The highly educated workforce attracts knowledge-based industries such as professional and business services, financial activities, and navigational, measuring, electromedical, and control instruments manufacturing.
Colleges and universities themselves are a knowledge-based industry that requires a highly skilled labor force to educate students, and the results benefit the Boston area by increasing the percentage of the workforce with college degrees. …