In a perfect world where higher education institutions’, employers’, and job seekers’ needs all align, there would be harmony between the types of degrees granted, jobs in demand, and the desires of individual job seekers. Higher education institutions would nimbly pivot to meet the needs of industry and technology while individuals have multiple options for meaningful employment.

Of course, there are numerous barriers standing in the way of this realization. Economists call these “labor market frictions”. This simply means that the system is not perfect: people change their minds, it takes time to build new education programs - even more time to recruit and graduate participants, people shift careers outside of their area of education, and technology can alter the demands of a role before the employer has time to write a job description.

Signs of these frictions appear in an analysis of graduation data from colleges and universities serving the RCA. When comparing new graduates over the last five years to the top areas of local job growth, there are mismatches between the number of graduates and the number of new jobs available to them, especially in high growth areas such as construction and logistics.

Rural Capital Area Degree Clusters vs Occupation Clusters

The data shows that while most occupation clusters in the RCA grew over the last five years (see the yellow bars), the number of graduates from their corresponding degree clusters mostly declined (see the green bars). Occupation clusters such as logistics, business, construction, and computers were some of the fastest growing, increasing employment by more than 20 percent. However, the number of graduates prepared to enter these roles did not increase at the same rates, or in the case of business and construction, declined. Meanwhile, agriculture was the only occupation cluster to lose jobs in the RCA, but it is clearly the fastest growing degree program in the surrounding region.

Breaking agriculture programs down into specific sub-clusters shows that agriculture science programs were the fastest growing. Agriculture science programs grew graduation rates by 96 percent in five years, almost doubling the size of the graduating classes. This is a broad discipline that tends to expose students to multiple aspects of the industry, ranging from economics to soil quality, rather than focus on one specific topic. For comparison, ag business and conservation programs grew enrollment by 28 and 29 percent. There are no ag production (crops and farming) programs producing graduates in the region.

Of course, growth rates alone can be misleading. A degree cluster may not have grown as quickly but still produce far more talent than the local job market can absorb. The figure below addresses this understanding, showing the difference between net new graduates in the region and net new jobs created. Where the number is negative, there were more jobs created than graduates. Where the number is positive, there were more graduates than new jobs for them to fill.

Rural Capital Area Net New Grads vs Net New Jobs

There were far more graduates in business, finance, economics, science & engineering, and health care from surrounding institutions than the RCA generated jobs for. This has positive implications for company attraction and expansion, proving a strong talent pipeline for employers in these fields who may not have to compete as hard for new hires. And, also indicates the fact that urban areas, such as Charlotte, tend to produce talent for broader geography than its immediately surrounding counties.

However, logistics and construction were some of the fastest growing occupation clusters in the region and the number of new graduates from these programs did not keep up with demand. Between these two sectors, there were roughly 8,500 more jobs created than new graduates in related fields of study.

Once again, the agriculture field is worth mentioning. There were roughly 2,200 more graduates in the last five years from regional institutions than there were new jobs for these individuals. Data from the National Center for Education Statistics shows that many new graduates in the region came from Blinn College in Brenham, TX. In 2020 the college graduated 156 individuals with associate degrees in agriculture science. As the only occupation cluster to lose jobs in the last five years but the fastest growing degree cluster, the labor market frictions in this sector are high.

Obviously, not every graduate goes on to find employment in their chosen field of study and not every job requires a degree in that specific field. Individuals change paths and careers; employers are increasingly embracing tactics such as skills-based hiring to find talent, which lessens the focus on very specific degree requirements. Overall, this data shows that the RCA, like any region, is not without labor market frictions. In some instances, this provides a steady flow of potential talent. In other sectors, such as construction and logistics, the focus should be on finding ways to increase the pipeline of qualified workers in order to match demand.