Document Type

Report

Publication Date

9-2014

Research Center

Center for Economic Development

Abstract

CEOs for Cities created the city dividend concept to catalyze collaborative economic progress in cities and regions. A city dividend is the economic benefit resulting from investing resources to successfully achieve a measurable, actionable goal toward your city’s and metro region’s economic progress. The objective of city dividends is to provide quantitative estimates of the economic benefits that metropolitan regions and cities could achieve by improving their performance on specific priority issues.

This report explores the Talent Dividend. The Talent Dividend associates educational attainment, as measured by college degrees, and personal income. Detailed methodology on how the Talent Dividend is calculated and associated data sources is included in Appendix A.

Talent Dividend

A successful regional economy depends on many factors, one of which is the population’s level of educational attainment. A significant amount of literature has attributed gains in educational attainment to increased earnings and a better quality of life for individuals. Edward Glaser studied the relationship between a region’s educational level and regional growth. He found that regions that have a higher percentage of the population with a bachelor’s degree (or higher) in comparison to other regions experienced both population and productivity growth. The educational level of a population was also a strong indicator of the formation of an agglomeration economy. An agglomeration economy is an economy that benefits from the colocation of businesses and people due to clustering of urbanization. In addition, studies over the last decade have shown that experience and education have been associated with higher wages, and those with high educational attainment have “propped up wages.” Obtaining additional education is now even more important since a significant educational achievement gap is emerging between the rich and the poor. The economic gains that result from education matter more now than ever.

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