Boston has a large pool of highly skilled employees. 51% of Boston’s adult population (aged 15+) held a higher education degree in 2016, against 35% elsewhere in the country. Consequently, Boston enjoyed a 29% premium in labour productivity over other parts of the US. The highly productive business services category accounted for 24% of employment in Boston in 2016, versus 18% in the rest of US.
Reflecting the higher labour productivity in the city and higher labour force participation rate (82% of the 15-64 year age segment, versus 74% in the rest of the US in 2016), households in Boston had on average 40% higher annual disposable incomes than in other parts of the US.
Compared to the rest of the US, an average household in Boston spent 30% more on consumer items (excluding housing and transport) in 2016. Proportionally, per household expenditure on education in Boston (3.0% of total expenditure in 2016) was higher than in other parts of the US, (2.3%) because the city is a major centre for higher education. Healthcare expenditure was also proportionally higher (23% of total expenditure in Boston, versus 22% elsewhere in the US). Boston was ranked as the seventh best place for medical care in the US in 2016.
In contrast, average household consumer expenditure on housing and transport in the city was only 18% greater than in the rest of the US in 2016, making Boston a rather affordable city, given the income advantage. In particular, Boston is not as car-reliant as some other metropolises in the country, which drives down transport expenditure.
With total GDP of USD414 billion in 2016, Boston is North America’s ninth largest metropolis. Its economy was, however, four times smaller than that of New York, while also lagging behind those of Los Angeles and Chicago, which boasted GDPs of USD960 billion and USD660 billion, respectively, in the same year. Nonetheless, GDP per capita in Boston was USD86,900 in 2016, 53% greater than the average across the rest of the US, and was surpassed by only San Francisco (with a GDP per capita of USD97,200) among the key American metropolises.
Boston is ageing, in line with the overall US trend. The demographic segment aged 65+ years experienced 18% growth over 2011-2016, which was much faster than the 1.7% expansion of the working age (15-64 years) segment. Meanwhile, the number of children (0-14 years) contracted by 1.2% over the same period. Compared to the rest of the US, the proportion of the population accounted for by children is lower than average in Boston (17% of the total population, versus 19% elsewhere in the US), while the share of the 65+ aged population is the same (15%).
Population by Age 2016
Source: Euromonitor International
As of 2016, average disposable income per household in Boston, of USD156,000, was 40% greater than in other parts of the country. The primary reason for this difference is the 29% higher labour productivity in Boston. The labour force participation rate in Boston, at 82% of the (15-64) working age population in 2016 versus 74% elsewhere in the US, contributed significantly as well.