Agglomeration and the success of arts majors working in entrepreneurship and innovation

ABSTRACT

In this study we look to understand whether living or working in a ‘hub’ increases the likelihood that college graduates with degrees in the arts are working in entrepreneurial occupations or innovative industries, and whether it increases their success in such occupations/industries. While the share of arts graduates working in the arts is low, recent empirical evidence suggests that large shares of arts graduates are working in occupations/industries that can be classified as entrepreneurial or innovative, potentially because of their creative education/training. However, little is known about where such works takes place, so we explore whether proximity to other creatives and/or entrepreneurial/innovative workers has an influence. The theory underpinning our work is the economics of agglomeration, as ample research on artists suggests that creatives benefit from proximity to other creatives. The popularity of Silicon Valley as a home for start-ups and tech firms suggests agglomeration is important in entrepreneurship and innovation as well. Using American Community Survey data, we find that living or working in a ‘hub’ has positive impacts on the likelihood arts graduates are working in occupations/industries that are entrepreneurial/innovative and on earnings in such areas, suggesting that agglomeration may have positive impacts on productivity.

KEYWORDS:

• Agglomeration
• hubs
• arts graduates
• entrepreneurship
• innovation

JEL:

• Z11
• L26
• O24

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 The list of occupations considered to be artists by the NEA can be found here: https://www.arts.gov/impact/research/arts-data-profile-series/adp-1/artists-occupations.

2 SNAAP and the NSCG both include survey questions that ask the respondent to self-report whether their job is related to their major field of study. The ACS asks respondents to report detailed occupations. While the NSCG also asks for occupations, they are more aggregated than in the ACS.

3 For more information on PUMAs see https://www.census.gov/programs-surveys/geography/guidance/geo-areas/pumas.html.

4 Tables A1–A4 in the online appendix give the complete list of PUMAs by state that meet the criteria for membership in each of the four hub categories. Arts majors are included in the calculation of entrepreneurship and innovation hubs. However, only one entrepreneurship hub and one innovation hub would be eliminated if arts majors were not included in these calculations.

5 The ACS inflation adjusts income to the final year of the period, which in this study is 2017. The pooled cross-section used in the ACS 5-year sample is intended to represent the labor force across the 5-year survey period.