Labor Force: Urban to Rural

Workforce Skills across the Urban-Rural Hierarchy
Federal Reserve Bank of New York Staff Report No0. 552
Jaison R. Abel, Todd M. Gabe, Kevin Stolarick
February 2012

Abstract
This paper examines differences in the skill content of work throughout the United
States, ranging from densely populated city centers to isolated and sparsely populated rural areas. To do so, we classify detailed geographic areas into categories along the entire urban-rural hierarchy. An occupation-based cluster analysis is then used to measure the types of skills available in the regional workforce, which allows for a broader measure of human capital than is captured by conventional measures. We fi nd that the occupation clusters most prevalent in urban areas—scientists, engineers, and executives—are characterized by high levels of social and resource-management skills, as well as the ability to generate ideas and solve complex problems. By contrast, the occupation clusters that are most prevalent in rural areas—machinists, makers, and laborers—are among the lowest in terms of required skills. These differences in the skill content of work shed light on the
pattern of earnings observed across the urban-rural hierarchy.

Key words: human capital, skills, occupations, urban-rural, earnings

This paper presents preliminary findings and is being distributed to economists
and other interested readers solely to stimulate discussion and elicit comments.
The views expressed in this paper are those of the authors and are not necessarily
reflective of views at the Federal Reserve Bank of New York or the Federal
Reserve System. Any errors or omissions are the responsibility of the authors.