Authors: Jaison R. Abel and Todd M. Gabe

This paper examines the relationship between human capital and economic activity in U.S. metropolitan areas, extending the existing literature in two important ways. First, we utilize new data on metropolitan-area GDP to measure economic activity. Using educational attainment as an indicator of human capital, we find that a one-percentage-point increase in the proportion of residents with a college degree is associated with a 2.3 percent increase in metropolitan-area GDP per capita. Second, we move beyond the conventional proxy for human capital—educational attainment—to develop new measures that reflect the types of knowledge within U.S. metropolitan areas. Results show that knowledge associated with the provision of producer services and information technology are particularly important determinants of economic vitality in U.S. metropolitan areas.