Universities and hospitals, as anchor institutions, play an important role in local economies through the jobs and economic benefits they provide. But what happens during downturns? Do college towns fare better?
In this report, researchers from the Philadelphia Fed analyzed the economic performance of State College, PA — home to Pennsylvania State University — during three economic recessions. They found that the university contributed to keeping the local economy stable, resulting in lower unemployment rates and faster job growth, thanks to robust hiring in the education and health services sectors.
However, heavy reliance on certain sectors can also introduce risks to local economies, as evidenced during the COVID-19 pandemic and the subsequent recession.
For more insights into how anchor institutions affect regional resilience, check out the full report.