How college towns can survive and thrive over the next 20 years

It's not about undergrads.

Photo by Brad West on Unsplash

Over the last three decades, if you wanted your town to succeed, there was a simple formula for success: Have a college.

In his landmark 2013 book The New Geography of Jobs, the economist Enrico Moretti showed that two types of places with lots of educated workers have tended to thrive in the U.S. — big “superstar” metros like San Francisco or New York City, and college towns. And when I say “thrive”, I don’t just mean economically — these places have enjoyed better health, lower crime, and a variety of other social advantages. Even as Rust Belt cities and small towns emptied out, you could do well if your town had a college in it. Nor was this just some kind of selection bias — economists have found that places that were lucky enough to receive land grants for higher education over a century ago are richer and more productive today. (The effect appears to be international, too.)

This was a local development solution that could really scale. There are only a handful of big superstar metros in existence, but America has a surprisingly large number of colleges — 2,832 four-year institutions, to be exact, scattered very evenly throughout the populated regions of the country. Even a small college like the University of Pikeville could create a bright spot of growth and health and good wages in the middle of declining Appalachia. As early as the late 90s, think tanks were extolling the benefits of “eds and meds” (colleges and hospitals). When I wrote for Bloomberg, I regularly suggested that the government beef up smaller colleges as a way of correcting the regional inequalities that many started worrying about after Trump’s election in 2016.

If I were a small American town, I would still probably go for eds and meds — and many are. But over the last few years, the U.S. university system has started to encounter some major headwinds, and the pandemic was another serious blow. As of 2023, the strategy of “just be a college town” no longer looks like an automatic of a ticket to regional prosperity.

I still believe college towns are well-positioned to thrive in the 2020s and 2030s, but I think the road is not going to be as easy as it was; as undergraduate enrollment and tuition flatline and remote work becomes more prevalent, these small cities are going to have to think carefully about what kind of economic and lifestyle advantages they can really offer.

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