Creativity and the crisis: The impact of creative workers on regional unemployment

Abstract

Over the past several years, we have witnessed the most severe economic crisis since the Great Depression. In this paper, we seek to understand how regional occupational structures are associated with metropolitan areas that have rebounded (or have not felt the recession much at all) and those regions that have been unable to recover their economies. In particular, we analyze the impact of the creative class in comparison with other occupational groups. Using Bureau of Labor Statistics unemployment statistics from July 2007 to February 2011, we study the composition of 369 metropolitan areas to observe whether there are patterns in unemployment rates and distribution of occupational groups. We study these cities through five distinct periods during this time period: Stable, Crisis, Unemployment Expansion, Peak and Post-Peak. We find that having a strong concentration of the creative class going into the crisis is associated with lower unemployment rates throughout the studied period. Like the creative class, highly skilled human capital is associated with lower unemployment throughout the studied period but proves to be a less influential variable in our regression results.