Why Metros Are Growing

Metropolitan areas, particularly urban cores, are the powerhouses of the post-Great Recession era. In the past year, 77 percent of the nation's metros gained jobs, according to the Bureau of Labor Statistics. In contrast, employment growth in nonmetro areas has been zero, says the USDA's Economic Research Service.

The lack of economic opportunity in nonmetro areas explains why they lost population between 2010 and 2012—the first loss ever recorded. The greater opportunity in metropolitan areas, and in particular central cities, explains why their populations are growing. Now a study by the Federal Reserve Bank of Cleveland shows that metropolitan populations are not only growing but changing in unexpected ways. Urban cores are attracting and retaining highly skilled residents (defined as those with a four-year college degree), a reversal of the pattern in past decades. "As a result of these trends," says economist Kyle Fee, "in many metro areas the residents of neighborhoods close to the central business district are now more educated than those in farther-away suburbs."

What explains the rising educational level of urban cores? Central cities have been able to attract and retain college graduates for a number of reasons, says Fee. One of those reasons is the growing preference for an urban lifestyle.

Source: Federal Reserve Bank of Cleveland, Population Distribution and Educational Attainment within MSAs, 1980-2010