Closing the educational attainment gap: How can southern middle Tennessee, experiencing significant economic decline, emerge as a globally competitive manufacturing region?Murat Arik, workforce, Tennessee, manufacturing, economic development, rural, training, education

Murat Arik

English

Research Papers in Economics

ural America has experienced dra-
matic changes in its economic land-
scape. The obvious manifestation of
this change is the steady decline of
manufacturing sector employment through
downsizing, plant closings, relocation of com-
panies overseas, and consolidation of branch
operations. Rural regions where traditional
manufacturing sectors dominated the economy
have been affected by these shifts dispropor-
tionally. Although increasing overseas competi-
tion and globalization have been seen as the
primary triggers in shifting economic dynamics,
technological changes further exacerbated the
situation in rural areas where basic infrastruc-
ture (i.e., information technology, physical
infrastructure, human resources) are not up to
the challenge of making the transition from tra-
ditional manufacturing to a technology-inten-
sive knowledge economy.
For many rural regions, the critical issue is to
manage this multifaceted transition in a way
that (1) strengthens existing businesses, (2)
upgrades workforce skills, (3) addresses small
business concerns, and (4) upgrades the aging
infrastructure. The ultimate goal is to create
employment and wealth. What should these
communities do to ensure success? One answer
is to understand, evaluate, and address work-
force-related issues. Based on my previous
study,
1 this article highlights some critical
issues regarding workforce education in the 14
counties of southern middle Tennessee.
Southern Middle Tennessee 
at a Glance
Strategically located between Nashville and
Huntsville, this region includes the following
14 counties: Bedford, Coffee, Franklin, Giles,
Hickman, Lawrence, Lewis, Lincoln, Marshall,
Maury, Moore, Perry, Warren and Wayne.
Nearly 22 states are within one day's drive from
the center of the region, located in Marshall
County.
Three major interstates dissect the region: I-65
connecting Nashville and Huntsville, I-24 con-
necting Nashville and Chattanooga, and I-40 to
the north. The region has significant market
potential, as nearly 2.5 million people live
within a 70-mile radius or one-hour drive from
its center.
Once the hub of traditional manufacturing, the
southern middle Tennessee counties have expe-
rienced major economic setbacks: first, through
the flight of manufacturing companies overseas,
and second, due to the recent prolonged eco-
nomic crisis. The manufacturing sector is still
the major source of employment, accounting for
more than one-third of jobs in Bedford, Giles,
Lincoln, Marshall, Perry, and Warren counties
as of the third quarter of 2008. In the rest of the
counties, employment makes up about 20 per-
cent of the manufacturing sector. Compared to
the third quarter of 2005, the manufacturing
continued on page 6
by Murat Arik
CLOSING THE EDUCATION GAP
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Tennessee’s Business  Vol. 18, No. 3 May 2009
How can southern middle
Tennessee, experiencing
significant economic decline,
emerge as a globally competitive
manufacturing region?
5sector shed nearly 9,000 jobs (a 24 percent
decline) in the 14-county region. 
These job losses have led to a spike in unem-
ployment in these counties since November
2008. Seven of the 14 counties had an unem-
ployment rate (not seasonally adjusted) 4%
higher than that of the U.S. as of February 2009
(Table 1). Only one of the 14 counties registered
a rate slightly lower rate than that of the U.S. 
Given the extent of job losses and unemploy-
ment as well as underemployment, building a
globally competitive economy requires a care-
ful look at the region's most important asset:
human capital.
Workforce Education 
in Southern Middle Tennessee
At the heart of any regional economic initiative
is the availability and quality of the workforce.
continued from page 5
Tennessee’s Business  Vol. 18, No. 3 May 2009
These counties
should develop
policies to upgrade
the skill and 
education levels of
the existing 
workforce.
County Name Current Unemp. Rate (02/09) % Difference from U.S. Avg. (02/09)
Bedford 10.8 +1.9
Coffee 10.3 +1.4
Franklin 10.2 +1.3
Giles 13.8 +4.9
Hickman 12.0 +3.1
Lawrence 14.6 +5.7
Lewis 15.1 +6.2
Lincoln 7.0 -1.90
Marshall 14.7 +5.8
Maury 11.6 +2.7
Moore 9.0 +0.1
Perry 24.1 +15.2
Warren 15.9 +7.0
Wayne 13.0 +4.1
Source: BLS and BERC
Table I: Southern Middle Tennessee Counties: Unemployment Rates
Figure I (a). Educational Attainment Levels, 2000
6This is especially true now due to major eco-
nomic shifts in rural areas. In the course of this
study, the following statement resonated across
counties: "We would like to bring high-paying,
high-tech jobs to the region." Although this is
an extremely desirable goal for rural communi-
ties where income and wages are falling behind
the national average while the cost of living is
increasing, the reality is that many of these
communities are significantly lagging behind
national averages in workforce education.
This dilemma is very visible in the region, as
the desire to have high-paying, high-tech jobs is
countered by the educational realities of the
workforce. Of course, a less desirable option is
to recruit workers with these qualities from
other regions.
How is the region performing in terms of work-
force education? Table II clearly illustrates the
large gap between the study region and Ten-
nessee on one hand and between the study
region and the U.S. on the other, in terms of
postsecondary education.
continued on page 8
Tennessee’s Business  Vol. 18, No. 3 May 2009
Figure I (b). Educational Attainment Levels, 2006
Table II. Educational Attainment: Then and Now (25 years and over)
2000 2006
Educational Attainment Region TN U.S. Region TN U.S.
Less than high school 29.79 24.10 19.60 24.05 19.10 15.90
High school graduate (includes equivalency) 38.21 31.60 28.63 40.68 34.40 30.20
Some college, no degree 16.94 20.00 21.05 16.31 19.20 19.50
Associateʼs degree 4.23 4.70 6.32 5.56 5.70 7.40
Bachelor's degree 6.78 12.80 15.54 8.62 14.10 17.10
Graduate or professional degree 4.04 6.80 8.86 4.78 7.50 9.90
Summary View
Less than high school 29.79 24.10 19.60 24.05 19.10 15.90
High school and over 70.21 75.90 80.40 75.95 80.90 84.10
Bachelor's and higher 10.83 19.60 24.40 13.40 21.70 27.00
Source: Tabulated from Census 2000 and American Community Survey
7Tennessee’s Business  Vol. 18, No. 3 May 2009
Although the 14-county region showed some
improvement between 2000 and 2006 in the
bachelor's degree and higher educational cate-
gories, it is still significantly behind the U.S.
average and Tennessee. For example, the num-
ber of those over age 25 with a bachelor's
degree or higher increased 2.75% in that period.
However, the region lagged behind the U.S.
13.6% in 2006 for the same educational attain-
ment level. Figure I illustrates these differences
across time and educational attainment levels.
One observation is that, compared to the U.S.,
the region has a significant surplus in less than
high school educational attainment and a sub-
stantial and stable deficit in bachelor's and
higher educational attainment.
Intergenerational Difference 
in Educational Attainment
While the gap in postsecondary educational
attainment is significant compared to both the
Tennessee and U.S. average, is there an inter-
generational difference in educational attain-
ment levels in the region as well? Figure II
looks at educational attainment level by age
cohort. 
According to Figure II, there is not much change
between the entering workforce (ages 25-34) and
those approaching retirement (ages 55-64) in the
less than high school educational attainment cat-
egory. The workforce approaching retirement is
relatively better off in the high school, some col-
lege, and graduate degree categories. The enter-
ing workforce is slightly better in the associate’s
and bachelor's degree categories.
A critical observation is that there is no signifi-
cant change in the "less than high school" cate-
gory. An analysis of occupational employment
by educational attainment shows that "less than
high school" as an educational requirement is no
longer part of the official job description for
nearly all occupations in the U.S. (www.bls.gov).
In order to address employment and wage issues
effectively, policies should aim at eliminating the
education gap in the region.
Extent of Educational Gap 
by Occupation
What is the extent of the educational gap in the
region? Table III provides a detailed look at the
region's employment by occupation and educa-
tional attainment. The table also compares the
percent of the region's workforce with a college
degree or above in each occupational category
to that of the U.S. workforce. The large gap
indicates that the region has the potential to
make significant gains in wages and income by
eliminating existing educational gaps in occu-
pational employment.
For example, only 33% of scientists and techni-
cians in the region have a college degree or
above as opposed to 79 percent in the U.S. This
translates into a gap of 46%, indicating signifi-
cant room for educational improvement in this
occupation. Similarly, the college and above
degree gap in legal services occupations is more
than 25%, in medical occupations 24%, in sales
continued from page 7
8Tennessee’s Business  Vol. 18, No. 3 May 2009
Table III. Educational Attainment by Occupation (%) (2006)
25%, and in computer programming and data-
base administration 19%. 
Eliminating higher education attainment gaps
even in these selected occupations is likely to
boost economic dynamics in the region. A syn-
chronized approach to workforce education and
cluster strategy is necessary for a successful
regional economic development initiative. 
Conclusion
The workforce in the southern middle Ten-
nessee counties has a deficit in educational
attainment compared to the U.S. In order for
these counties, already experiencing significant
economic decline, to emerge as a globally com-
petitive manufacturing region, they should
develop policies to upgrade skill and education
levels of the existing workforce. In doing so,
these counties are likely to increase employ-
ment opportunities as well as income level for
the unemployed and underemployed labor
force. Now is the right time to invest in human
capital to create a globally competitive regional
workforce. 
Murat Arik is the associate director of MTSU's
Business and Economic Research Center.
Note
1. Murat Arik and David A. Penn (2008), "Increasing
Competitiveness through Strengthening Regional
Industrial Clusters: Middle Tennessee Marketing
Region," Business and Economic Research Center,
MTSU.
Southern Middle Tennessee Region U.S. Avg. Region-U.S
Occupations < High  High Some  Assoc.  Gap in 
School School College Degree College+ College+ College+
Managerial Positions  6.07 34.48 19.99 2.89 36.58 60.00 -23.42
Business Services Positions 0.00 29.48 19.04 16.84 34.64 51.00 -16.36
Financial Services Positions 2.27 15.20 24.76 12.46 45.32 63.00 -17.68
Computer Programmers &
Database Administrators 0.00 22.21 15.26 15.08 47.45 66.00 -18.55
Engineering 1.12 14.45 29.52 8.02 46.89 60.00 -13.11
Scientists and Technicians 0.00 41.76 17.49 7.51 33.24 79.00 -45.76
Community Services 12.42 5.64 6.41 7.86 67.67 69.00 -1.33
Legal Services Occupations 0.00 27.63 16.33 16.33 39.71 65.00 -25.29
Education 4.72 18.64 10.19 5.94 60.52 77.00 -16.48
Entertainment 3.64 25.44 13.93 13.98 43.01 54.00 -10.99
Medical 0.00 10.52 14.74 40.77 33.97 58.00 -24.03
Health Services 20.32 35.34 36.14 4.26 3.94 15.00 -11.06
Protective Service Workers 7.02 53.69 22.84 3.49 12.95 23.00 -10.05
Eating and Drinking 39.33 42.69 14.24 2.68 1.06 9.00 -7.94
Cleaning Services 37.90 46.02 10.10 0.00 5.98 8.00 -2.02
Personal Services 20.05 42.31 26.55 7.06 4.03 21.00 -16.97
Sales 16.77 42.43 24.02 4.52 12.26 37.00 -24.74
Office Workers 6.87 39.78 31.75 12.43 9.18 18.00 -8.82
Farming, Fishing & Forestry 59.00 22.62 18.38 0.00 0.00 7.00 -7.00
Construction 31.33 56.82 9.03 0.99 1.82 4.00 -2.18
Extraction (Drilling) 51.21 48.79 0.00 0.00 0.00 3.00 -3.00
Maintenance and Repair 16.57 50.80 23.10 6.77 2.76 9.00 -6.24
Production Workers 23.68 54.98 15.21 2.50 3.63 7.00 -3.37
Transportation 30.88 55.16 11.55 1.18 1.22 12.00 -10.78
Source: American Community Survey and BERC Estimates
9

It Is Time to Invest in Human Capital

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