The 38,000 college and university students at the Five College Consortium in Western Massachusetts essentially increase the population of Hampshire County by 25% each fall. With this large student population comes the need for ancillary academic services, dining options, recreation opportunities, shopping options, and nightlife. Thousands of local residents are employed on or near these college campuses as custodians, college store and postal service clerks, retail workers, coaches, health care workers, and special event coordinators. So when COVID-19 moved the nexus of student activity from sprawling campuses to the internet, many of these jobs disappeared overnight.
As a result, Amherst, home to three of the consortium’s five colleges, contains two of the three zip codes with the highest modeled unemployment rates in Hampshire County as of May 9. The third zip code largely coincides with Smith College’s campus in Northampton. This is according to Pioneer Institute’s new COVID-19 Unemployment Tracker, which presents unemployment estimates modeled by Applied Geographic Solutions, Inc., based in Thousand Oaks, California.
Notably, this pattern of high unemployment rates near college campuses was much less consistent before the COVID-19 outbreak (see Figure 1). On March 7, UMass Amherst’s campus zip code, 01003, was estimated to have a relatively high unemployment rate at about 7%, but other zip codes in Amherst and the nearby college towns of South Hadley and Northampton all hovered near 2-3%.
Figure 1: Estimated unemployment rate in zip codes containing Five College Consortium member universities, March-May 2020
Source: Applied Geographic Solutions, Inc.
At the same time, it is generally harder to find such a pattern in other parts of the state, where the economy is more diverse and zip codes with larger populations mask the impact on particular schools. For example, the zip codes containing Northeastern University, Boston University, and UMass Boston all had higher unemployment rates than average on May 9, but the figures were still higher in parts of Roxbury, Dorchester, and East Boston.
Even some well-endowed Boston-area schools are struggling to provide benefits to blue-collar workers who suddenly don’t have dorms to clean, food to cook, or services to provide to students. The effect on workers at on-campus snack shacks and nearby student-oriented businesses in Amherst and Northampton is perhaps more devastating, given that students make up almost 20% of Hampshire County’s population.
The data used in this tracker and research was provided by Applied Geographic Solutions, Inc. (AGS), of Thousand Oaks, California, according to their weekly release including estimates through May 9, 2020, and is presented with their written authorization. The methodology that AGS used to model this data is described here. Because the federal government does not report unemployment rates by ZIP Code or community, and issues unemployment reports on a time-delayed basis, AGS has created an economic model to estimate real-time unemployment by state and municipality using a combination of federal employment sources. In its modeling, AGS uses data from the Bureau of Labor Statistics labor force by ZIP Code and occupation; weekly state-by-state initial jobless claims by occupation; and monthly labor force publications that provide detailed unemployment estimates by state, and major metropolitan areas. AGS says this about its methodology: “On a weekly basis for the next several months, AGS will be creating and making available an updated, rolling weekly unemployment estimate at the block group, ZIP code, and county levels of geography. While we do not pretend to have “on the ground” information to support these estimates, our initial tests on the data to date suggest that our methodology is a reasonable one – we are focusing on the distribution of employment by occupation and using a series of estimates of vulnerability curves to simulate what is being reported at a national and state level.”
Andrew Mikula is the Lovett & Ruth Peters Economic Opportunity Fellow at the Pioneer Institute. Research areas of particular interest to Mr. Mikula include urban issues, affordability, and regulatory structures. Mr. Mikula was previously a Roger Perry Government Transparency Intern at the Institute and studied economics at Bates College.