Towns and cities with colleges and universities as the backbone of their local economies have fared relatively well through each recession since the Great Depression in the 1930s, and new census data show that large college and university towns have served as an economic safe haven through our most recent downturn. Compared to areas where the recession hit hardest, students and residents of college towns wouldn’t be mistaken in feeling as if they’ve dodged a bullet.
Don’t get me wrong – colleges and universities (especially public institutions) have nearly all felt the brunt of budget cuts and dwindling endowments. But while the financial health of the institutions themselves might have suffered, the surrounding areas have largely managed to maintain low unemployment rates, stable housing prices, and steady economic growth. All things considered, college towns are some of the best places to live and work during hard economic times.
Why is this the case? Why have colleges struggling to make ends meet kept their local economy humming right along? Shouldn’t the effects of recession hit college towns just as hard as the rest of the country? The answers to these questions might surprise you.
Communities with large student bodies and relatively few permanent residents tend to flourish in down times because of the stimulative effect of large numbers of college students descending on the campus for two-thirds of the year. College students spend money even in a recession – food, housing, and other living expenses aren’t exactly optional expenditures for students. Big cities who happen to be home to large colleges and universities don’t feel these effects as acutely as towns or cities with smaller populations of permanent residents, who depend on these institutions for employment and stability. Many college and universities have also benefited from recent federal research funds which have attracted educated workers and helped ease the budget constraints of state and local governments.
Colleges and universities act as an anchor for these small towns; often they are the largest employer in the area and aren’t as directly vulnerable to the booms and busts of the markets. In addition, many people who are laid off or recently unemployed take the opportunity to relocate and return to school to increase their future value in the workplace. This boosts enrollment in colleges during downturns, in turn adding fuel to the economic engine of the area and allowing institutions of higher education to expand their workforce.
College towns have some of the lowest unemployment rates in the nation – in January, three of the four areas with unemployment below 4% were home to large colleges and universities (the national unemployment rate was then 8.5% – it’s currently 9.5%, according the U.S. Department of Labor.) Businesses, restaurants, real estate companies, bars, coffee shops – these are all tailored to appeal to the college crowd on and off campus. When college students spend, businesses expand and hire more workers; thus, college towns are some of the best places to find work in a tough economic environment.
These are some considerations to take into account when considering your education. Do some research on your town or city to see what impact the recession has had on the school and the surrounding area. How high is the cost of living in comparison to other places? What’s the employment outlook for the area, and what are your chances of landing a job? The bad economy has affected nearly everyone, but you can take some steps to make sure you’re in a good position for the future.