How Does Education Attainment Impact Where People Rent?
Education is arguably the strongest predictor of present and future levels of American workers’ income. As a result, there is a correlation between education attainment and the size of a building a renter is likely to call home.
It should come as no surprise that individuals with advanced degrees are typically employed in better paying jobs that require higher skills. As noted in our post on the occupational profile of apartment renters, while small building residents represent a wider range of job skills, workers living in large apartment buildings with higher rental costs skew toward high-skill occupations.
Educational attainment levels further confirm the pattern. While large apartment property residents on average have higher levels of educational attainment, small building residents mirror the wider American working population.
As shown above, about half of all workers living in small asset properties hold high school diplomas, while another 27 percent completed college. These shares were similar to the overall worker population in the US.
On the other hand, large buildings had nearly twice as many workers with advanced degrees, including masters, professional, and doctoral degrees. Put another way, about half of all large building residents at least graduated from college, compared to 36 percent in small buildings.
The association between education and income is illustrated below, where among small building residents, those with advanced degrees earned more than twice as much as workers with a high school diploma.
As discussed in previous posts, small property renters are often younger and earlier in their careers. It’s no surprise they might have lower average incomes compared to large building residents. Interestingly, the income gap between small and larger property residents gets larger with the level of education. High school graduates residing in large properties earn 11 percent more than their small property peers. For residents with graduate degrees, the difference is much wider at 40 percent.
It will be interesting to watch the dynamic between educational degrees and the types of buildings graduates choose to rent in over time. When you consider that the average 2015 graduate walked off the stage with a diploma and $35,051 in student loans, they might decide to eschew a highly amenitized community in favor of a smaller, more affordable apartment property.
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