Educational attainment and unemployment in the Inland Empire
Unemployment rates vary widely by educational attainment. While many of us might take education for granted, the Inland Empire has one of the lowest rates of bachelor’s degree attainment among large metropolitan areas, so it’s an important point to make: education reduces the risk of unemployment during a downturn.
The Current Population Survey (CPS) contains information on a worker’s labor force status and educational attainment. The strength of the CPS is that it offers current, monthly information. The downside of the CPS is that the sample sizes for metro areas like the IE are pretty small. A work-around is to pool across multiple months of the CPS to produce more reliable estimates of something that likely doesn’t change substantially over time.
I take all CPS results for March 2021-August 2021, or 6 months of data. I look at something that doesn’t change over time – the relationship between educational attainment and unemployment – and I only look at the two other major metro areas in Southern California: Los Angeles and San Diego. This should make my estimates safer from small-sample bias.
In the 6-month period between March-August 2021, the unemployment rate among workers with a bachelor’s degree or higher was 5.3% in the Inland Empire, 6.5% in Los Angeles, and 5.0% in San Diego. Unemployment rates were 8.6%, 10.4%, and 6.4% in those same areas respectively for workers without a bachelor’s degree. In sum, unemployment rates for people without a bachelor’s degree or higher range from 30% to 60% higher than the rates for people with a bachelor’s degree or higher.
As a recent report from the UC Riverside Center for Social Innovation pointed out, the Inland Empire does relatively well in providing full time work for workers with less than a bachelor’s degree. Still, the probability of losing such a job is higher for these workers, and the prospects for income growth – as I pointed out several months ago – would therefore be lower.
To create more economic stability and strengthen income growth, educational attainment needs to remain an objective for policymakers in the Inland Empire.