The Prominence of Colleges and

Universities in the Boston Metropolitan Area

Employment and wage data from the BLS Quarterly Census of Employment and Wages (QCEW) are 

used to analyze the labor market impact and contributions of colleges and universities in the Boston 

area economy. 

The Boston metropolitan 

area1

 is recognized by 

many for its concentration 

of prestigious private colleges and 

universities. Th e metropolitan area 

is home to over 80 private colleges 

and universities employing 68,600 

people and attracting over 360,000 

students from all over the world. 

Th is report uses employment 

and wage data from the Bureau 

of Labor Statistics’ Quarterly 

Census of Employment and 

Wages (QCEW) program for the 

years 1990 and 20062

 to analyze 

the labor market impact and 

contribution of these institutions 

of higher education to the Boston 

area economy. 

Th e analysis indicates a strong 

and steady growth in both 

wages and employment, with 

job creation in colleges and 

universities almost double the 

rate for total private employment. 

Wage gains also were higher 

for those working in colleges 

and universities than for those 

in overall private industry. Th e 

continuing growth of colleges 

and universities enhances the 

quality of the labor force and 

fuels knowledge-based industries, 

which are attracted by that 

quality. 

Higher Education 

Employment, Past and Present

In 1990, there were almost 2,000 

private colleges and universities 

in the United States, employing 

almost 725,000 workers. (See table 

1.) Massachusetts had 82 private 

colleges and universities, employing 

more than 69,000. Fifty-eight of 

those institutions (70.7 percent) 

were located in the Boston area,

RegionalReport

SUMMARY 09-01 FEBRUARY 2009 U.S. BUREAU OF LABOR STATISTICS

Authors: 

Denis M. McSweeney

Regional Commissioner

Boston/New York Regional Offi ce

Walter J. Marshall

Regional Economist

formerly with the 

Boston Regional Offi ce 

Regional Report February 2009 1
employing almost 58,000 workers.

By 2006, there were dramatic 

increases in the number of 

colleges and universities, as well 

as in their employment. In the 

United States, there were 4,000 

private colleges and universities, 

employing an estimated 1,030,000 

workers. Massachusetts’ colleges 

and universities had grown to 120, 

employing almost 83,000. Eightythree (69.2 percent) of those 

institutions were in the Boston 

area, employing over 68,000 

workers.

Colleges’ and Universities’ 

Job Growth from 1990 to 2006

In the Nation over this 16-

year period, overall job growth 

increased by 24.1 percent, 

while the growth in college and 

university employment was 

42.4 percent. Massachusetts 

employment gains in colleges and 

universities were almost double 

the overall percentage of growth 

in the private sector (19.5 percent, 

compared with 9.9 percent). 

While the Massachusetts 

economy added 250,000 jobs 

over the period, 5 percent of 

the total growth, or 13,500 jobs, 

were attributable to gains in 

higher education employment. 

Th e Boston area accounted for 

approximately 80 percent of the 

overall job gains in colleges and 

universities, with 10,600 jobs 

added over the 16-year period, for 

a growth rate of 18.4 percent, well 

above the overall increase of 11.1 

percent for the metropolitan area. 

Colleges’ and Universities’ 

Industry Concentration 

among the Largest 

Metropolitan Areas

Using a location quotient3 comparison among the largest metropolitan areas nationally confi rms 

the dominance and importance 

that higher education employment had in the Boston area 

over the 16-year period. In 1990, 

Boston ranked fi rst among major 

metropolitan areas, with a location quotient of 3.92. 

Sixteen years later, 

the Boston area still 

ranked fi rst, with a 

location quotient of 

3.63. (See chart 1.) Th e 

Boston area location quotient indicates that college 

and university employment was 

approximately three-and-a-half 

times more concentrated, compared with the U.S. average, and 

shows that none of the other major metropolitan areas came close 

to matching the Boston area’s 

concentration of employment in 

higher education. 

Colleges and Universities as 

a Generator of Jobs for the 

Knowledge-Based Industries

Th e concentration of colleges 

and universities in both 

Massachusetts and the Boston 

metropolitan area has a positive 

impact on the quality of the 

labor force. Th e highly educated 

workforce attracts knowledgebased industries such as 

professional and business 

services; financial activities; 

and navigational, measuring, 

electromedical, and control 

instruments manufacturing.

While colleges and universities 

are a knowledge-based industry 

that requires a highly skilled 

labor force to educate students, 

the results benefit the Boston 

area by increasing the percentage of the workforce with college degrees. Nationally in 

2006, 27 percent of adults 25 

years and older had bachelor’s 

degrees and 9.9 per-cent had 

more advanced degrees. Among 

the 50 States, Massachusetts 

ranked fi rst, with 37 percent of 

people with bachelor’s degrees, 

and second highest (15.6 percent), or virtually identical to 

Maryland’s rate of 15.7 percent 

in people with advanced degrees. In the Boston area, an even 

greater percentage of the population—more than 40 percent—had 

bachelor’s degrees.4

 

Boston has consistently attracted 

venture capital funds for biotechnology-related investments. In 

2006, the Boston area attracted 

almost $1.1 billion in investment 

funds for biopharmaceuticals and 

almost $400 million for medical 

devices, ranking it second to San 

Francisco, which reported $1.3 

billion for biopharmaceuticals 

and $1.1 billion for medical de2 Regional Report February 2009
TABLE 1: Employment and wages in the total private sector and in colleges and universities in the 

 U.S., Massachusetts, and the Boston metropolitan area, annual averages, 1990 and 2006

 1990 2006 Change, 1990–2006

United States Number Percent

Employment

Total private establishments 5,860,445 8,505,496 2,645,051 45.1

Total private employment 90,855,141 112,718,858 21,863,717 24.1

Colleges and universities, establishments 1,985 4,049 2,064 104.0

Colleges and universities, employment 723,107 1,030,032 306,925 42.4

Colleges and universities, share of total private 

employment

.80% .91% — —

Location quotient 1.00 1.00 — —

Wages

Total private average weekly wage $447 $816 $369 82.6

Total private average annual wage $23,262 $42,414 $19,152 82.3

Colleges and universities, average weekly wage $458 $885 $427 93.2

Colleges and universities, average annual wage $23,835 $46,039 $22,204 93.2

 Massachusetts Number Percent

Employment

Total private establishments 164,346 201,657 37,311 22.7

Total private employment 2,537,238 2,789,469 252,231 9.9

Colleges and universities, establishments 82 120 38 46.3

Colleges and universities, employment 69,423 82,952 13,529 19.5

Colleges and universities, share of total private 

employment

2.74% 2.97% — —

Location quotient (LQ) 3.44 3.25 — —

Wages

Total private average weekly wage $510 $1,016 $506 99.2

Total private average annual wage $26,497 $52,837 $26,340 99.4

Colleges and universities, average weekly wage $521 $1,033 $512 98.3

Colleges and universities, average annual wage $27,080 $53,726 $26,646 98.4

 Boston Number Percent

Employment

Total private establishments 113,165 134,309 21,144 18.7

Total private employment 1,859,951 2,066,158 206,207 11.1

Colleges and universities, establishments 58 83 25 43.1

Colleges and universities, employment 57,960 68,606 10,646 18.4

Colleges and universities, share of total private 

employment

3.12% 3.32% — —

Location quotient 3.92 3.63 — —

Wages

Total private average weekly wage $538 $1,106 $568 105.6

Total private average annual wage $27,988 $57,533 $29,545 105.6

Colleges and universities, average weekly wage $527 $1,066 $539 102.3

Colleges and universities, average annual wage $27,387 $55,447 $28,060 102.5

Source: BLS Quarterly Census of Employment and Wages (QCEW).

Regional Report February 2009 3
vices.5

 To further highlight local 

prominence in knowledge-based 

industries, despite being ranked 

13th in population, Massachusetts 

had the fourth-highest number of 

patents granted in 2006.6

 Boston’s 

reputation and prominence have 

been strengthened due to the 

fact that 56 Nobel laureates have 

taught and do research in the 

area’s colleges and universities.

Supersector Industry 

Concentration among the 

Largest Metropolitan Areas

Using location quotient analysis 

at the supersector7

 industry level 

highlights those industries, which 

are prominently concentrated in 

the Boston area. An examination 

of the 10 supersector industries 

in 2006 indicates that the highest 

concentrated industry in Boston 

was education and health services 

(location quotient = 1.34), which 

includes not only colleges and 

universities, but nursing homes, 

hospitals, and elementary and 

secondary schools. (See chart 2.) 

In Boston, employment in this 

supersector was 34 percent higher 

than the national average. 

Th e Boston area also had a high 

concentration of other knowledge-based industries including 

information (location quotient = 

1.32), fi nancial activities (1.24), 

and professional and business services (1.22). Th ese industries are 

generally regarded as knowledge 

based with high wages and have a 

minimal negative environmental 

impact. In contrast, Boston had 

lower-than-average concentrations in such industries as manufacturing, construction, and natural resources and mining.

Wages in Colleges and Universities, 1990–2006

In 1990, total U.S. private average weekly wages were $447. (See 

table 1.) Massachusetts and Boston, with average weekly wages 

of $510 and $538, 

respectively, 

were 14 percent and 

20 percent above 

the national average weekly wage. 

Massachusetts 

ranked fi fth highest in average weekly 

wages among the 50 States in 

1990. Th e average weekly wage in 

colleges and universities in 1990 

was $458 nationally, $521 in Massachusetts, and $527 in the Boston area. 

Sixteen years later, in 2006, 

Massachusetts ranked third 

highest among the 50 States 

in the average weekly wage for 

private-industry workers, at 

Boston-Cambridge-Quincy

Philadelphia-Camden-Wilmington

Chicago-Naperville-Joliet

Washington-Arlington-Alexandria

New York-Northern New Jersey-Long Island

Los Angeles-Long Beach-Santa Ana

Atlanta-Sandy Springs-Marietta

Miami-Fort Lauderdale-Miami Beach

Houston-Sugar Land-Baytown

Phoenix-Mesa-Scottsdale

Dallas-Fort Worth-Arlington

Seattle-Tacoma-Bellevue

San Bernardino

CHART 1: Location quotients for colleges and universities in the 13 largest metropolitan areas, 

 annual average, 2006

Area

3.63

2.47

1.54

1.53

1.52

1.04

0.93

0.86

0.73

0.68

0.45

0.45

0.43

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00

Location Quotient

Note: U.S. location quotient for colleges and universities = 1.00.

Source: BLS Quarterly Census of Employment and Wages (QCEW). 

4 Regional Report February 2009
$1,016. Wages for colleges and 

universities in Massachusetts 

were $1,033, or slightly above the 

average for all private industry. 

In the Boston area, college and 

university wages were $1,066, 

slightly lower than the $1,106 

average for private industry, 

where high-paying industries 

such as high technology, 

finance, and biotechnology are 

more concentrated. From 1990 

to 2006, private-industry wage 

gains were 82 percent nationally, 

but 99 percent in Massachusetts 

and 106 percent in 

Boston. Those 

working in 

colleges and universities saw 

a national average weekly pay 

increase of 93 percent, a gain 

of 98 percent in Massachusetts, 

and an increase of 102 percent 

in Boston. 

In 2006, total private wages in the 

United States were $4.7 trillion, 

of which $47 billion were generated by colleges and universities. 

Th us, roughly 1.0 percent of all 

national wages were earned in 

colleges and universities. In contrast, total private wages in Boston were $118 billion, of which 

$3.8 billion, or 3.2 percent, were 

earned in higher education. 

Summary

In Massachusetts and, more specifi cally, in the Boston metropolitan area, colleges and universities 

have exerted an important positive infl uence on the local and 

regional labor market economies. 

Compared with the Nation and 

Total, all private industries

Natural resources and mining

Construction

Manufacturing

Trade, transportation, and utilities

Information

Financial activities

Professional and business services 

Education and health services

Colleges and universities (subsector of education and health services)

Leisure and hospitality 

Other services 

CHART 2: Location quotients, by industry supersector in the Boston metropolitan area, 

 annual average, 2006 

Industry

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00

Location Quotient

1.00

0.14

0.71

0.79

0.84

1.32

1.24

1.22

1.34

3.63

0.88

1.03

Note: U.S. concentration for industry supersector = 1.00.

Source: BLS Quarterly Census of Employment and Wages (QCEW). 

Regional Report February 2009 5
the largest metropolitan areas in the country, Boston has the highest industry concentration, or location 

quotient, for colleges and universities, both in 2006 and historically back to 1990. 

Colleges and universities have a measurable economic impact in Boston. Over the 16-year period 

examined, they acted as a powerful job generator, with job growth roughly twice the rate for total private 

industry. Boston-area colleges and universities’ total wages as a proportion of total private wages were 3.2 

percent, compared with only 1.0 percent nationally. In addition, colleges and universities have a powerful 

economic impact by improving the quality of the labor force. As a result, the Boston area’s highly educated 

labor force continues to attract knowledge-based industries such as high technology, biotechnology, and 

fi nancial services. Th ese industries have high wages, generate jobs faster than overall job growth does, and 

attract much-needed venture capital funds required to sustain the area’s prominence as a center for higher 

education and research. 

Footnotes

1 According to the BLS Quarterly Census of Employment and Wages (QCEW), the Boston metropolitan area is defi ned as all cities and towns in the BostonCambridge-Quincy, MA-NH Metropolitan Statistical Area, which includes the Boston-Quincy, MA, Metropolitan Division-Norfolk, Plymouth, and Suff olk 

Counties; Cambridge-Newton-Framingham, MA, Metropolitan Division-Middlesex County; Essex County, MA, Metropolitan Division-Essex County; and 

Rockingham County-Staff ord County, NH, Metropolitan Division-Rockingham and Straff ord Counties. 2

 1990 was chosen because it was the earliest year that the QCEW used the North American Industry Classifi cation System (NAICS) code 611310, which 

includes all private 4-year colleges, universities, and professional schools (for example, business administration, dental, law, and medical) as well as theological 

seminaries, that grant baccalaureate or graduate degrees.

3

 Location quotient analysis quantifi es the concentration of college and university employment as an industry at the national, State, and metropolitan area 

levels. Th e national location quotient for each industry is always 1.0. 4

 Educational attainment data are from the U.S. Census Bureau’s American Community Survey, 2006.

5

 According to Dow Jones VentureSource.

6

 According to the U.S. Patent Trademark Offi ce. 7

 Under NAICS, the industrial composition and organization of industries are defi ned by the type of activity or sector they are engaged in. Th is analysis uses 

the BLS standard for sector aggregation at the two-digit level, of which there are 11 “supersectors”: natural resources and mining; construction; manufacturing; 

trade, transportation, and utilities; information; fi nancial activities; professional and business services; educational and health services; leisure and hospitality; 

other services; and government. Th is report excludes the government supersector.

6 Regional Report February 2009