Study: Sources of growth in degree holders across urban and rural Canada

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University degree holders in large cities are more prevalent and are growing at a more rapid pace than in smaller cities and rural areas, a new research paper has found.

In addition, the study "Cities and growth: In situ versus migratory human capital growth," concluded that high rates of degree attainment across urban populations are related to both the ability of large cities to attract degree holders and higher rates of degree attainment in large cities.

Using data from the 1996 and 2001 censuses, the paper tested the relative importance of two sources of human capital growth. The first was net migratory flows, both domestic and foreign; the second was growth resulting from higher rates of degree attainment among the resident populations of cities.

It found that both sources are important. The relatively high rate of growth in university degree holders in cities has stemmed from net migratory flows. But the more dominant force has been the higher rate of degree attainment within the cities themselves.

Rates of degree attainment increase with city size

There is a strong, positive and consistent relationship between the population of a metropolitan area and the share of its population aged 15 and over with a university degree.

In 2001, an average of 7% of the population in rural areas had a university degree of some sort. This share rose to about 10% for small urban areas with a population between 10,000 and 99,999, and to just under 15% among medium-sized urban areas with a population between 100,000 and 499,999.

For large metropolitan areas, those with a population greater than 500,000, one-fifth (20%) of the population held a degree.

The paper found that the large presence of degree holders in larger urban centres is associated with their ability to both attract and generate degree holders.

In 2001, a young person from a large urban area was twice as likely to obtain a degree as one from a rural region.

In large urban areas, 12.7% of young adults aged 20 to 24 had university degrees, more than twice the proportion of 5.8% in rural areas.

The geographic concentration of degree holders matters for two reasons. First, there is growing evidence that cities with a relatively strong presence of degree holders experience, on average, stronger subsequent employment growth.

Second, there is also strong evidence from France, the United States and Canada that up to half of the difference in wage levels across urban and rural areas is due to the concentration of workers. This was particularly true in larger cities that have made significant investments in their human capital through education.

Internal and international migration favour larger urban centres

The relative roles of internal and international migratory flows depend on location along the urban-rural spectrum.

For large urban areas, net migratory flows from other parts of Canada play a relatively small role. In large cities, about 8% of the net gains in degree holders between 1996 and 2001 resulted from inflows from smaller urban and rural parts of Canada.

Outside large urban centres, internal migration plays a much more significant role. All urban-rural classes lose degree holders to large urban centres. For instance, small urban areas gained about 55,780 degree holders between 1996 and 2001, but this occurred despite a net loss of 12,550 degree holders through migration.

From the perspective of these smaller urban areas, these are relatively large flows that substantially reduce the number of degree holders, particularly among the young.

Immigration was an important contributor to growth in large urban centres. Net immigration accounts for, on average, 42% of the growth of degree holders. Outside large urban areas, immigration contributed far less to the growth in degree holders and, in general, did not compensate for the loss of degree holders due to internal migration.

Hence, the net gains in degree holders for these smaller urban and rural areas were driven by their ability to generate degree holders from their own populations.

Degree attainment higher among youth in larger urban centres

Location has a strong effect on the likelihood that youth will obtain a university degree.

For young adults aged 20 to 24 who resided in a large urban area in 1996, 12.7% had obtained a university degree. This proportion fell to 12.1% for medium sized urban areas, 8.9% for small urban areas and 5.8% for rural areas.

This basic pattern holds after using different ages that take into account the age at which youth are likely to be still in high school, as well as a series of other controls.

The role of migration, both internal and international, is to reinforce this pattern of degree attainment.

The research paper "Cities and growth: In situ versus migratory human capital growth" is now available online as part of The Canadian Economy in Transition (11-622-MIE2008019, free) series. From the Publications module of our website, choose Studies.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Mark Brown (613-951-7292), Micro-economic Analysis Division.

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