Abstract
With the economy in a poor state, economic development agencies are searching for a compass directing them towards the industries that would be most beneficial to their local economies. This paper investigates how manufacturing composition affects income and educational attainment. The results could help further the understanding of the importance of industry composition in the well being of a Metropolitan Statistical Area (MSA). The analyses focus on MSAs within California and are conducted using fixed effects. In the first set of regressions, I model educational attainment in an MSA is as a function of manufacturing composition, allowing for non-linearities through squaring and cubing manufacturing composition. In the second set of regressions, real income is modeled similarly as a non-linear function of manufacturing composition. Higher levels of dependency on manufacturing for jobs were found to decrease both educational attainment and income. These results could provide valuable information for use in economic development efforts.