The best way for New Hampshire to foster a productive economy is to invest in a well-educated workforce, according to a new report. Researchers from the Economic Policy Institute’s Economic Analysis and Research Network (EARN) found that productivity growth and high-wages are overwhelmingly found in states with more educated workers.
Between 1979 and 2012, states that grew their share of adults with at least a college degree experienced greater increases in productivity (measured as gross state product per hour worked) and greater increases in median wages, researchers found.
In New Hampshire’s case, a 16 percentage point increase in college attainment levels between 1979 and 2012 is accompanied by an almost 115 percent increase in productivity. Median worker compensation over that time also increased in NH – by about 35 percent.
In contrast, providing tax breaks to businesses does not improve productivity, which was closely linked to growth in wages. Furthermore, tax breaks drain critical resources that otherwise could be invested in education.
Here are some of the main conclusions from the report, “A Well-Educated Workforce is Key to State Prosperity.”
- Overwhelmingly, high-wage states are states with a well-educated workforce. There is a clear and strong correlation between the educational attainment of a state’s workforce and median wages in the state.
- States can increase the strength of their economies and their ability to grow and attract high-wage employers by investing in education and increasing the number of well-educed workers.
- Cutting taxes to capture private investment from other states is a race-to-the-bottom strategy that undermines the ability to invest in education.
- Providing expanded access to high-quality education will not only expand economic opportunity for residents, but also likely do more to strengthen the overall state economy than anything else a state government can do.