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5/7/2017 5:35:00 PM
Study shows income, education correlation

Doug Leduc, Greater Fort Wayne Business Weekly

For years, production work was viewed as the ticket to above-average income without a college degree. But a recent Ball State University study shows a strong correlation between income and educational attainment in the state with the nation’s heaviest concentration of manufacturing.

Indiana Economic Development Corp. markets the state as a national manufacturing powerhouse, which is home to five automotive original equipment manufacturers and more than 500 automotive suppliers.

Manufacturing contributed almost $100 billion to Indiana’s gross domestic product in 2015, which was up more than $6 million from the previous year, according to the U.S. Department of Commerce. The industry employed about 20 percent Indiana’s workforce - a larger share than any other state.

Many studies at the national and international level show a strong correlation between educational attainment and income, said Nathan Law, a graduate research assistant at Ball State from Spencerville who authored its study, “The Relationship between Educational Attainment & Wages.”

The question facing researchers at Ball State’s Center for Business and Economic Research, he said, was: “Does the relationship hold in the state; does that apply to us?”

“The topic was a response to some inquiries we’ve had over the past year asking about the relationship between income levels and education attainment. Community leaders and officials throughout the state had an interest in it,” Law said.

Educational earnings

For the population segment that was 25 or older, U.S. Census Bureau data showed in 2014 five of the 10 Indiana counties with the highest income also were among the state’s 10 counties with the highest educational attainment levels.

For educational attainment, Indiana’s counties were ranked according to the percentage of the population 25 or older that had achieved a bachelor’s degree or more.

The study compared educational attainment levels with three income measures for each county - average weekly wages, median household income and average per capital income.

“They all ended up with a positive correlation, that educational attainment leads to higher income,” Law said. “They went up no matter what variable we looked at. It’s not a perfect (trend) line but, in general, there’s that relationship there.”

For example, Hamilton County, which is just above Indianapolis, had the state’s highest per capita income, at $40,012, as well as the highest educational attainment level, with 55.6 percent holding a bachelor’s degree or higher.

Of the state’s 92 counties, Allen County ranked 12th in educational attainment, with 26.6 percent of the population 25 or older holding a bachelor’s degree or higher. It ranked 18th in per capita income, at $25,485.

Allen County was the highest ranking for educational attainment among the 11 counties of northeast Indiana, and the third highest within the region for per capita income. Whitley County had the region’s highest per capita income, at $26,120, followed by Kosciusko County, at $25,531.

LaGrange County was among the 10 counties in the state with the lowest educational attainment and income levels. It ranked 83rd for educational attainment, with 10.8 percent of the population holding a bachelor’s degree or higher, and 87th for per capita income, at $19,863.

The county has a large Amish population. No other northeast Indiana counties were among the 10 lowest for educational attainment or per capita income.

Taken as a group, the 10 Indiana counties with the lowest educational attainment level averaged 10.2 percent of residents with a bachelor’s degree or higher. The group’s average per capita income was $20,660.

In contrast, the group of 10 Indiana counties with the highest levels of educational attainment averaged 34.7 percent of residents with a bachelor’s degree or higher. The group’s average per capita income was $28,973.

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