ATLANTA—Occupations characterized by high cognitive and people skill requirements, and therefore cities with high concentrations of those occupations, are generally less sensitive to recessions, according to a study co-authored by Georgia State University economist Carlianne Patrick and Amanda Weinstein of the University of Akron.
Their research is the first to provide evidence that metropolitan areas’ recovery from economic downturns depends more on the skill composition—cognitive, people or motor—of occupations in the area than on educational attainment, which is harder to measure.
“Existing studies show that recessions reinforce trends already in place, so we looked at the data in light of multiple recessions, especially the Great Recession. With each recession, it seemed to take the economy longer to recover, and we wanted to understand that particular trend,” said Patrick. “In the Great Recession, for example, more than 8.6 million people across the country lost their jobs, but not always in proportionate amounts to their community populations.”
The researchers looked at metro areas with high levels of cognitive and people skills, and others with a high concentration of motor, or physical, skills. They discovered that workers with high cognitive skills, and/or those with people skills, experienced less unemployment, especially during recessions, than did those with high motor skills.
What’s more, metro areas, even small ones, fortunate enough to have a high concentration of workers with cognitive and people skills were not only less likely to feel the effects of a recession, they were more likely to bounce back quickly from one.
“Occupational data shows that people with cognitive skills also tend to have people skills, and it’s the ability to relate to people that is most important in reducing the length of time it takes a city to return to pre-recession levels,” said Patrick.
However, it may be more difficult for workers who rely on motor skills to transition easily to those occupations that require high levels of cognitive and people skills.
“Education is important but it’s not enough. It’s critical to cultivate people skills in workers with motor skills, to help them weather changing economic conditions,” Patrick said.
Because workers need high levels of cognitive and people skills to increase their chances of employment during a recession, the researchers suggest that governments, particularly in cities and regions that have historically relied on motor skills, consider training workers to build up their cognitive and people skills to foster more resilient and recession-proof economies.
The study has been published in the Journal of Regional Science.
Story by Alison Tyrer
Department of Economics
Carlianne Patrick is committed to policy-relevant research that, broadly speaking, investigates how local variation in economic incentives and other conditions affect economic agents. Her research covers several topics under this umbrella. One strand focuses on the effect of, and theoretical justification for, policies aimed at altering firm decisions, such as where to locate (i.e., economic development policies). Another explores the effect of local public goods and tax policies on households’ location decisions and housing. A third studies how locational characteristics influence labor market outcomes.