High-skilled workers in small towns are a ‘waste of resources,’ says controversial Princeton study

By Steven Melendez

It would be more efficient if big cities like New York and San Francisco were transformed into “cognitive hubs” for white-collar work, even if that meant paying other workers to stay away, according to a new study from economists at Princeton University and the Federal Reserve.

“Our analysis underscores that while CNR workers are extremely useful, they are also scarce,” the economists wrote, referring to “cognitive non-routine” workers like doctors, lawyers, computer scientists, and managers. “Furthermore, their productivity is tremendously enhanced by living with other CNR workers. So attracting them to smaller towns with more mixed populations represents a waste of resources. CNR workers are too valuable for society to be used in this way. A better policy is to reinforce existing trends and let them concentrate in cognitive hubs while incentivizing non-CNR workers to move and help smaller cities grow.”

While big cities would need to have some non-cognitive workers, and small towns would still need some professionals like doctors and lawyers, they say, overall the economy would be more efficient if brain workers were concentrated in big cities, which would become smaller and less congested after economic incentives were delivered to send workers to the designated type of community. Essentially, cognitive workers would be taxed to provide payments to other workers to live outside of the hub cities.

“Some large cities, such as Miami or Las Vegas, remain non-CNR abundant since they are particularly productive in industries where CNR workers are employed less intensively,” they wrote, pointing to hospitality and retail-related work.

Critics on social media were quick to point out that such a policy could boost racial and class segregation. Already, studies have shown that where children are raised can have a significant impact on future income and opportunity for class mobility.

In response to written questions about the study from Fast Company, a representative for Princeton said the authors wouldn’t be able to answer them.

In a summary of the paper, they emphasized that the research was an “academic exercise” and that they didn’t address all the factors or potential repercussions of such a policy.

“Of course, we acknowledge that where workers with certain skill profiles live—especially when their concentration in specific cities might lead to social segregation—has profound implications that extend beyond more immediate economic welfare,” they wrote. “And importantly, our model does not directly address all of the underlying forces that influence individual labor market outcomes.”


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