Problem on the Plains: College Earnings Premiums in Small Metropolitan Areas

Abstract

I use the American Community Survey to examine how college earnings premiums differ across small metropolitan statistical areas (MSAs) in the U.S. I document that the West North Central Division (Plains Region) has especially low average college earnings premiums. Controlling for observable MSA characteristics via regression explains some of the difference between the Plains and other regions, but large and important differences remain. The low return to education for small MSAs in the Plains suggests that they will face special challenges building and retaining human capital in the near future. These areas may especially struggle to attract college-educated in-migrants.

JEL Classification: J20, J30, R10