What’s Up? (Feb. 26-March 4)

Republicans Block Investing Rule

Senate Republicans, joined by two Democrats, voted on Wednesday to approve a resolution — already passed by the House — to block a Labor Department rule that would allow retirement plan managers to incorporate environmental, social and corporate governance considerations into their investment decisions. This practice, known as E.S.G., was a widely accepted norm in financial circles for almost 20 years until it recently became a target for conservatives and others who argued E.S.G. investing was hurting businesses and little more than a trend they termed “woke capitalism.” The rule from the Labor Department had been intended to overturn a Trump-era policy that limited investing options to purely financial matters. The Biden administration argued that it was necessary to allow retirement advisers to factor in issues like climate change, which has economic consequences. President Biden is expected to use the first veto of his presidency to override the anti-E.S.G. measure.

Justices Weigh Student Loan Cancellation

The Supreme Court heard arguments last week in a case that would decide the fate of some 26 million student loan borrowers who applied to have their debts canceled under President Biden’s forgiveness plan. The issue at hand is not whether it is constitutional to wipe out billions in student debt, but whether Mr. Biden has the authority to do so without Congress’ approval. Mr. Biden introduced the policy by executive order in August, announcing that the federal government would cancel up to $20,000 per borrower. After meeting a flurry of legal challenges, Mr. Biden’s plan was blocked from going into effect in November by a lower court. During arguments last week, conservative justices on the Supreme Court — who have a majority — appeared skeptical of the Biden administration’s power to carry out sweeping debt cancellation, while the court’s liberal members said there was a precedent for the secretary of education to address emergencies like the student debt crisis.

Some Companies Are Still in Russia. Here’s Why.

A year into the war in Ukraine, hundreds of Western companies remain in Russia despite a vast array of sanctions as well as pressure from boycott campaigns and human rights groups. Some of these companies began scaling back their operations in the immediate aftermath of Russia’s invasion but have yet to complete a full exit of the country. Pfizer, for example, stopped investing in Russia but still sells some products there and sends the profits to Ukraine humanitarian groups. Carlsberg, the world’s third-largest brewer, said it was leaving Russia last March but was still trying to find a buyer for its Russian breweries that would agree to allow the company to buy them back after the war ends. Companies have encountered other hurdles to leaving Russia, including, the beer maker Heineken said, warnings from Russian prosecutors that closing or suspending operations would be deemed an intentional bankruptcy.

What’s Next? (March 5-11)

The Next Jobs Report? Who Knows?

After the jobs report for January blew past the consensus forecast — employers added 517,000, an increase from 260,000 the month before — it is difficult to say with certainty what February’s report will show on Friday. Analysts expected to see that the economy added 215,000 jobs last month, which would be in line with the general downward trend of jobs reports up until January. But those surprising numbers suggested that it might not be a smooth, or predictable, descent for the job market. That’s a growing concern for officials at the Federal Reserve, who are looking for signs that their efforts to tame inflation are filtering through the entire economy.

Behind the Scenes at Fox News

As Fox News headed toward a trial with Dominion Voting Systems, the company accusing Fox of defamation in a $1.6 billion suit, Rupert Murdoch, Fox’s chairman, acknowledged that several hosts for his networks promoted the false narrative that the 2020 election was stolen from President Donald J. Trump. “I would have liked us to be stronger in denouncing it in hindsight,” Mr. Murdoch said in a deposition that was released last week. He added that he could have stopped these hosts, including Sean Hannity, Jeanine Pirro, Lou Dobbs and Maria Bartiromo, but didn’t. There has been a steady trickle of revelations like these over the past two weeks, including legal filings with private messages between Fox News hosts that showed that what they were saying publicly often contrasted with their private views. But news coverage of the filings has largely been absent from a vast majority of conservative outlets. Fox News and its sister outlet, Fox Business, have so far avoided the story, too.

Powell Testifies to Congress

Jerome H. Powell, the chair of the Federal Reserve, will appear before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday. The Fed chair reports to Congress twice a year to discuss how the central bank is responding to economic conditions and the overall economic outlook. He will also take questions from lawmakers. When Mr. Powell last met with the committee in June, he emphasized the Fed’s commitment to bringing down inflation to its 2 percent target, which had become increasingly difficult, he said. A recession, he added, was a “possibility.” At this week’s hearing, Mr. Powell is likely to address the strong jobs numbers and the persistent pace of inflation. But he will probably avoid saying anything too definitive, as there is one more jobs report and fresh inflation data set to be released before the Fed’s next rate decision later this month.

What Else?

Some lawmakers in Congress fear developments in artificial intelligence are far outpacing their ability to regulate the technology. The Biden administration unveiled rules on Tuesday for its “Chips for America” program, which would allot $50 billion to shore up semiconductor research and manufacturing in the United States. And a coal mining strike that lasted almost two years ended without a deal on Friday; negotiations over a contract are expected to continue once the miners return to work.

Four months ago, a small San Francisco company became the talk of the technology industry when it introduced a new online chatbot that could answer complex questions, write poetry and even mimic human emotions.

Now the company is back with a new version of the technology that powers its chatbots. The system will up the ante in Silicon Valley’s race to embrace artificial intelligence and decide who will be the next generation of leaders in the technology industry.

OpenAI, which has around 375 employees but has been backed with billions of dollars of investment from Microsoft and industry celebrities, said on Tuesday that it had released a technology that it calls GPT-4. It was designed to be the underlying engine that powers chatbots and all sorts of other systems, from search engines to personal online tutors.

Most people will use this technology through a new version of the company’s ChatGPT chatbot, while businesses will incorporate it into a wide variety of systems, including business software and e-commerce websites. The technology already drives the chatbot available to a limited number of people using Microsoft’s Bing search engine.

OpenAI’s progress has, within just a few months, landed the technology industry in one of its most unpredictable moments in decades. Many industry leaders believe developments in A.I. represent a fundamental technological shift, as important as the creation of web browsers in the early 1990s. The rapid improvement has stunned computer scientists.

GPT-4, which learns its skills by analyzing huge amounts of data culled from the internet, improves on what powered the original ChatGPT in several ways. It is more precise. It can, for example, ace the Uniform Bar Exam, instantly calculate someone’s tax liability and provide detailed descriptions of images.

But OpenAI’s new technology still has some of the strangely humanlike shortcomings that have vexed industry insiders and unnerved people who have worked with the newest chatbots. It is an expert on some subjects and a dilettante on others. It can do better on standardized tests than most people and offer precise medical advice to doctors, but it can also mess up basic arithmetic.

Companies that bet their futures on the technology may — at least for now — have to put up with imprecision, which was long taboo in an industry built from the ground up on the notion that computers are more exacting than their human creators.

“I don’t want to make it sound like we have solved reasoning or intelligence, which we certainly have not,” Sam Altman, OpenAI’s chief executive, said in an interview. “But this is a big step forward from what is already out there.”

Other tech companies are likely to include GPT-4’s features in an array of products and services, including Microsoft’s software for performing business tasks and e-commerce sites that want to give customers new ways of virtually trying out their products. A number of industry giants like Google and Facebook’s parent company, Meta, are also working on their own chatbots and A.I. technology.

ChatGPT and similar technologies are already shifting the behavior of students and educators who are trying to understand whether the tools should be embraced or banned. Because the systems can write computer programs and perform other business tasks, they are also on the cusp of changing the nature of work.

Even the most impressive systems tend to complement skilled workers rather than replace them. The systems cannot be used in lieu of doctors, lawyers or accountants. Experts are still needed to spot their mistakes. But they could soon replace some paralegals (whose work is reviewed and edited by trained lawyers), and many A.I experts believe they will replace workers who moderate content on the internet.

“There is definitely disruption, which means some jobs go away and some new jobs get created,” said Greg Brockman, OpenAI’s president. “But I think the net effect is that barriers to entry go down, and the productivity of the experts goes up.”

On Tuesday, OpenAI started selling access to GPT-4 so that businesses and other software developers could build their own applications on top of it. The company has also used the technology to build a new version of its popular chatbot, which is available to anyone who purchases access to ChatGPT Plus — a subscription service priced at $20 a month.

A handful of companies are already working with GPT-4. Morgan Stanley Wealth Management is building a system that will instantly retrieve information from company documents and other records, and serve it up to financial analysts in conversational prose. Khan Academy, an online education company, is using the technology to build an automated tutor.

“This new technology can act more like a tutor,” said Khan Academy’s chief executive and founder, Sal Khan. “We want it to teach the student new techniques while the student does most of the work.”

Like similar technologies, the new system sometimes “hallucinates.” It generates completely false information without warning. Asked for websites that lay out the latest in cancer research, it might give several internet addresses that do not exist.

GPT-4 is a neural network, a type of mathematical system that learns skills by analyzing data. It is the same technology that digital assistants like Siri use to recognizes spoken commands and self-driving cars use to identify pedestrians.

Around 2018, companies like Google and OpenAI began building neural networks that learned from enormous amounts of digital text, including books, Wikipedia articles, chat logs and other information posted to the internet. They are called large language models, or L.L.M.s.

By pinpointing billions of patterns in all that text, the L.L.M.s learn to generate text on their own, including tweets, poems and computer programs. OpenAI threw more and more data into its L.L.M. More data, the company hoped, would mean better answers.

OpenAI also refined this technology using feedback from human testers. As people tested ChatGPT, they rated the chatbot’s responses, separating those that were useful and truthful from those that were not. Then, using a technique called reinforcement learning, the system spent months analyzing those ratings and gaining a better understanding of what it should and should not do.

“Humans rate which stuff they like to see and which stuff they don’t like to see,” said Luke Metz, an OpenAI researcher.

The original ChatGPT was based on a large language model called GPT-3.5. OpenAI’s GPT-4 learned from significantly larger amounts of data.

OpenAI executives declined to disclose just how much data the new chatbot had learned from, but Mr. Brockman said the data set was “internet scale,” meaning it spanned enough websites to provide a representative sample of all English speakers on the internet.

GPT-4’s new capabilities may not be obvious to the average person first using the technology. But they are likely to quickly come into focus as laypeople and experts continue to use the service.

Given a lengthy article from The New York Times and asked to summarize it, the bot will give a precise summary nearly every time. Add a few random sentences to that summary and ask the chatbot if the revised summary is accurate, and it will point to the added sentences as the only inaccuracies.

Mr. Altman described the behavior as “reasoning.” But the technology cannot duplicate human reasoning. It is good at analyzing, summarizing and answering complex questions about a book or news article. It is far less adept if asked about events that have not yet happened.

It can write a joke, but it does not show that it understands what will actually make someone laugh. “It doesn’t grasp the nuance of what is funny,” said Oren Etzioni, the founding chief executive of the Allen Institute for AI, a prominent lab in Seattle.

As with similar technologies, users may find ways of coaxing the system into strange and creepy behavior. Asked to imitate another person or playact, this kind of bot sometimes veers into areas it was designed to stay away from.

GPT-4 can also respond to images. Given a photograph, chart or diagram, the technology can provide a detailed, paragraphs-long description of the image and answer questions about its contents. It could be a useful technology for people who are visually impaired.

On a recent afternoon, Mr. Brockman showed how the system reacted to images. He gave the new chatbot an image from the Hubble Space Telescope and asked it to describe the photo “in painstaking detail.” It responded with a four-paragraph description, which included an explanation of the ethereal white line that stretched across the photo. A “trail from a satellite or shooting star,” the chatbot wrote.

OpenAI executives said the company was not immediately releasing the image description part of the technology because they were unsure how it could be misused.

Building and serving up chatbots is enormously expensive. Because it is trained on even larger amounts of data, OpenAI’s new chatbot will increase the company’s costs. Mira Murati, OpenAI’s chief technology officer, said the company could curtail access to the service if it generated too much traffic.

But in the long term, OpenAI plans to build and deploy systems that can juggle multiple types of media, including sound and video as well as text and images.

“We can take all these general-purpose knowledge skills and spread them across all sorts of different areas,” Mr. Brockman said. “This takes the technology into a whole new domain.”

Britain’s top financial official started the year with a plea. To those who retired early in the pandemic or have not found the right job after furlough, Jeremy Hunt said, “Britain needs you.”

Many analysts have concluded the British economy is stumbling partly because it doesn’t have enough workers. The Bank of England has slashed its expectations about Britain’s economic potential, suspecting that there is little prospect for growth in the labor supply. Without additional workers, productivity and economic activity will falter.

Employment dropped around the world during the worst of the pandemic, but unlike elsewhere, in Britain it hasn’t rebounded. The number of working age people counted as “economically inactive” is still about 490,000 higher than in February 2020, according to data from the Office for National Statistics published Tuesday. Nearly two-thirds of them are over 50.

This is an abrupt reversal from the past, when the gradual growth of Britain’s labor force has been a powerful engine for economic growth. Mr. Hunt, the chancellor of the Exchequer, has made expanding the work force one of his central aims and appears to have early retirees in his sights.

“We will look at the conditions necessary to make work worth your while,” Mr. Hunt said in January. He will announce more details on how he will do so in what Mr. Hunt has called his “back-to-work budget” on Wednesday. More skills training for people over 50 has been announced already and reforms to pensions are expected.

But asking early retirees to go back to work could be an insurmountable challenge.

“Many of these adults who have left the labor market are living comfortably in their early retirement, and there’s little that government can do to change their mind,” Louise Murphy, an economist at the London think tank Resolution Foundation, said in a presentation last month.

Among this group are people who had worked in professional and scientific occupations and came from high-paying industries, according to the Resolution Foundation. They are also more likely to have private pensions and own their homes outright.

The structure of Britain’s pension system helps, too. While workers can’t gain access to their state pension until they are 66, most private pensions allow drawdowns from the age of 55.

“History tells us that those who take early retirement rarely return to the work force,” Ms. Murphy said. Instead, it’s better to focus on access to affordable child care and support for people with health conditions and disabilities to remain employed.

About three dozen people told the The New York Times about their decision to retire early, with most saying they had little intention of returning to work, and certainly not to full-time or office jobs. Many cited relief from the stress of their old roles; or said health conditions or caregiving responsibilities made returning to work impractical.

And most were enjoying a more flexible daily life, exploring hobbies and spending time with friends and family they feared they had neglected when they were working.

Here is a selection of their experiences.

The Student

For more than a decade, Jonathan Hollow commuted for four hours each day, from his home on Britain’s east coast to work in London and back.

“The commute was at the limits of one’s tolerance, really,” he said. But what drove him to retire early, as the coronavirus raged in June 2020 and he was 53, was more existential. “I just thought, I don’t want to die doing this job,” he said.

“So I had to do my maths very carefully,” he said, to see if he could bridge the gap until he could access his pension two years later. Mr. Hollow was in a particularly good position to make these calculations: He held a senior job at the Money and Pensions Service, a government agency set up to improve people’s financial literacy and give them advice.

After another year of contract work at the agency, Mr. Hollow stopped working at that job and put his expertise into co-writing a book, called “How to Fund the Life You Want,” that would, among other things, help others making retirement decisions.

Mr. Hollow, now 55, is back commuting to London but much less frequently. He has started pursuing a master's degree in ancient history and had loaded up his schedule with Latin classes. On Fridays, he retreats from the modern world to a London library filled with the works of Plato, Sophocles, Virgil and others.

Next? Maybe a doctorate, he said.

The Gardener

Stephanie Munn loved her job as a dermatologist, moving straight through medical school to becoming a full-time consultant, without any career breaks.

But the pandemic moved her practice online, and doing consultations and diagnoses via a screen made her nervous. Meanwhile, she was spending the early pandemic lockdowns with her partner’s son and his young family.

“Priorities changed in Covid, and I wanted to spend more time with family,” she said. “And in the meantime, my mother was failing, too. She’s 86 this year and has dementia. She was needing me more. And I just thought, enough’s enough.”

Ms. Munn retired earlier than planned, in September 2020 at the age of 57.

Since then, Ms. Munn keeps a schedule that easily rivals the intensity of her routine while she was employed. She helps care for her mother, visiting her multiple times a week at a nursing home. She looks after her four grandchildren, particularly during school holidays; has a demanding volunteer and training role at her church; is in a choir and serves as its librarian; and is working on a vegetable garden at her home.

“I really don’t know how I had time to work,” she said. “The days are never boring, they are always full on.”

She said she wouldn’t go back to her previous job, not even part time. She’s financially comfortable, and returning to work would demand completing time-intensive medical training requirements each year, regardless of how few hours she worked.

She doesn’t think it’s practical to ask older people to go back to work. “People can be contributing to the economy in another ways,” she added. “That sometimes gets undervalued.”

The Walker

Tom Brown doesn’t miss the 5 a.m. decisions he had to make for his last job. He worked as an information technology project manager for the civil service, which included running software updates overnight. Somewhere in the early hours of the morning, he’d have to make a call about whether to push ahead or pull the plug if there was a risk that updates wouldn’t be completed by 7 a.m.

Nor does he miss the 70-minute bus-and-train commute into London. “After lockdown, I thought, I just don’t want that grief,” he said. “That just hastened my decision to leave work.” And so in July, at age 61, he retired.

Now, Mr. Brown can indulge his love of walking. He goes for long walks solo or with groups, two or three times a week. Sometimes in Britain, sometimes abroad. Sometimes he leads the excursions.

“I walk about 50 miles a week,” he said.

Would he go back to work? Only if it was really interesting part-time work, he said. He’s about to embark on some work as a film extra.

The Wine Aficionado

For about eight months, Jana Hamel juggled her work as a full-time business consultant — advising financial services companies and start-ups in fintech, environmental tech and education tech — with caring for her husband while he underwent cancer treatment. Initially, she worked remotely, by his side in hospital rooms, or at home.

“Over time it became more and more difficult to have the physical time and mental space to continue,” she said. And so, she retired in 2019 when she was 54.

Not long after, she was able to access a portion of her pension tax free and used the money to buy two farmhouses in eastern Canada, where she grew up. They were a better investment for her pension, she said, adding with a laugh that each one cost less than a garage in London.

Besides remotely managing the renovations on the houses and supporting her husband, Ms. Hamel stays connected to her previous job, supporting businesses or sitting on boards in case she wants to return to work.

But her latest passion is wine. Just before the pandemic, she got an advanced-level sommelier qualification. She’s contemplating taken the next and expert-level qualification, the Level 4 Diploma by the Wine & Spirit Education Trust. It requires at least 500 hours of study time, four exams, a written research assignment and tasting a lot of wine.

It would be a fitting goal for what she has termed her “third life,” focused on the projects and people that are “interesting and stimulating, as opposed to drudgery,” she said.

For decades, institutions of higher education provided steady, well-paid jobs in small towns where the industrial base was waning. But the tide of young people finishing high school is now also starting to recede, creating a stark new reality for colleges and universities — and the communities that grew up around them.

As Americans have fewer children and a diminishing share of young adults pursue a degree, the once-burgeoning market for college slots has kicked into reverse. Although undergraduate enrollment stabilized somewhat in 2022, it’s still down about 7.6 percent since 2019.

“It looks like the future is declining numbers of young people likely to attend college, even in growing areas like the Mountain West,” said Nathan Grawe, an economics professor at Carleton College in Minnesota who studies the demand for postsecondary education. “We’ll start to have some tough stories.”

Evidence of a shrinking student body is everywhere in the western Pennsylvania borough of Clarion, population 3,880, which has taken immense pride in the graceful campus of Clarion University since the institution was founded as a seminary 156 years ago.

Since 2009, when it had 7,346 students, the university has shrunk by nearly half. With the drop in enrollment has come the loss of nearly 200 staff members, mostly through attrition. Last year, the school even lost its name, as it was merged with two of the 13 other universities in the Pennsylvania State System of Higher Education, creating a multicampus university called PennWest.

Tracy Becker, who looks out on Main Street from her broad desk at the city’s chamber of commerce, says there aren’t as many young volunteers for community events like the annual Autumn Leaf Festival, which has been held during homecoming weekend since 1953.

Kaitlyn Nevel’s cafe used to be staffed mostly with university students; now she has one such employee. As foot traffic lightened, she branched into catering. “Ideally, I would love to see the university stay and thrive, but you just have to try and have however many backup plans,” Ms. Nevel said.

As Ms. Nevel’s resigned optimism suggests, declining enrollment doesn’t necessarily spell doom for college towns. Despite the lower student head count, few empty storefronts mar Clarion’s downtown. It has even attracted new businesses like Mechanistic Brewing, which Chelsea Alexander started with her husband in 2019 after moving back from Washington, D.C.

Ms. Alexander is one of 28 people in her family to attend the local university. Since 1905, her family has run a clothing shop in town, which sells a line of T-shirts that trade on alumni nostalgia for favorite eateries that have long since closed and for towering dorms that have been demolished. But as graduating classes shrink, even alumni visits will taper off.

Ms. Alexander’s father, Jim Crooks, operates the store, and he has organized local merchants to spruce up the compact main street and market their businesses to potential visitors who may have no such connection to the town.

“For many years, the university was carrying a lot of the businesses,” said Mr. Crooks, who has also converted four apartments above the shop from student housing into Airbnb lodgings. “Everybody’s just saying, ‘We can’t depend on the university.’”

Although Pennsylvania’s university system had been shrinking for a decade, along with the rest of higher education, it experienced a sudden shock when students disappeared during the pandemic. Among those who noticed: the leaders at the Federal Reserve Bank of Philadelphia, whose territory across Pennsylvania, New Jersey and Delaware has a higher density of colleges and universities than most.

Along with large hospital systems, which are often affiliated with universities, educational institutions make up a substantial share of local economies that used to be dominated by manufacturing, logging and mining. Patrick T. Harker, the president of the Philadelphia Fed, wanted to find out how big that share was — since the education and medical sectors were starting to show cracks as well.

“Traditionally, ‘eds and meds’ have been thought of as recession-proof,” Dr. Harker said. “This pandemic showed that is not true.”

Not all of those institutions are equally vulnerable, however. Rural hospitals have been drying up even as large health care chains build new facilities in fast-growing suburbs, while the dwindling pool of students flocks to state flagships. “They’re stronger than ever, while the regional systems are really struggling,” said Deborah Diamond, a staff economist at the Philadelphia Fed.

Dr. Diamond put together a tool that showed how much different regions depended on health care and higher education. The places at the top of the dependence list were predictable, like the Durham-Chapel Hill area of North Carolina, with two powerhouse universities. But they also included smaller areas, like the one surrounding Bloomsburg, Pa., two and a half hours east of Clarion on Interstate 80. There, institutions including Geisinger Health and Bloomsburg University — another state-owned school — make up 21.9 percent of local employment and 18.3 percent of regional income.

“As we’ve seen some declines in manufacturing employment, their economic relevance is higher than it’s ever been,” said Fred Gaffney, the president of the area’s chamber of commerce.

A similar set of factors is evident in Clarion County, where the university is still the largest employer, followed by Clarion Hospital. Walmart comes next, and then a few plants making building materials and prefabricated housing, several social service organizations and the county government. The county used to have more manufacturing, including a large glass plant that closed in 2010. As that receded, so did the county’s population; its labor force dropped to 16,000 in 2022, from about 21,000 in 2008.

In the same period, Clarion University’s enrollment began to fall, as did state funding, raising the price of attendance. In 2021, Daniel Greenstein, the chancellor of the State System of Higher Education, proposed forming two clusters of three schools each, to consolidate operations and offer more classes across campuses.

“We had to align our costs with our new enrollment numbers,” Dr. Greenstein said in an interview. “We were built out as if we were still having 120,000 students when we had 85,000. You just can’t do that. Like every American family, you have to live within your means.”

At the same time, Mr. Greenstein requested more money from the State Legislature to enable the system to freeze tuition and offer more scholarships, which he said was critical to arresting the slide in enrollment. The state increased the system’s base funding by 15 percent in 2022 and threw in $125 million from a federal stimulus measure. The freshman class grew slightly last fall, but not enough to offset another overall drop in enrollment.

For the merged schools, swooning enrollment underestimates the degree to which student presence has faded on campus. To bolster their course catalogs, the schools are offering more of their classes online. That allows some students to show up in person only a few days a week — a trend that may accelerate as the system pursues more adult students, some of whom just need to finish degrees or complete shorter certificate programs.

Clarion’s mayor, Jennifer Fulmer Vinson — another Clarion graduate — sees that as a loss for the borough. History classes come less often to her antiques shop, which sits in a century-old house reclaimed from a long-gone fraternity, stuffed with curios including an old Coke machine and a cabinet full of war medals.

“Why are students going to come pay to live on campus when they never leave their room?” Ms. Vinson said. “It’s become more of a ghost town.” (The university says that the first-year student experience is meant to be campus-centered and that most courses will remain in person.)

About an hour’s drive west on Interstate 80 from Bloomsburg, the town of Lock Haven also has a university that last year merged with two others in the state-owned system. As the school has shrunk and well-paid staff members have moved away, the state’s substantial tax-free land holdings have started to grate on local residents.

Gregory Wilson, the city manager, has created a handout showing what the median property owner pays in taxes to subsidize Lock Haven University: $186 annually.

“I think the hope has always been that the investment they’re making to have the university here is somehow returned to them,” Mr. Wilson said. “But that becomes a harder sell as the university becomes smaller.”

The contraction has come alongside another recent and unwelcome development: The local hospital, which the sprawling University of Pittsburgh Medical Center bought in 2017, announced in January that it would shutter its inpatient operations, forcing residents to travel at least a half an hour for serious care.

All of it has been profoundly frustrating for Angela Harding, a Clinton County commissioner, who says that while she values the hospital and the university, drawing new residents to Lock Haven becomes harder as those economic anchors lose their grip.

“I’m sick and tired of having to fight for every single crumb that we get,” Ms. Harding said.

Colleges and the towns they occupy can do little about demographic currents. But they should, experts say, reinforce each other — the university can offer space for community functions and support for small businesses, for example, while the town can throw events for prospective students and their parents. Vacant student housing could be converted into homes for new residents who might be able to work remotely or want a quiet place to retire.

Matthew Wagner, the director of programs for Main Street America, a group dedicated to the development of small downtowns, says he sees less town-gown tension now that municipalities and schools understand their shared fates.

“Much like if you had a manufacturer that was facing headwinds, we need to think of the university as an economic development retention program, and direct our assets and resources that way,” Dr. Wagner said.

Lock Haven has taken that idea to heart. Its main street is vibrant, with several new boutiques interspersed with longstanding local restaurants. Fabre Sanders, whose father runs a window-treatment store, moved back from Boston a few years ago to start a candy and gift shop. During the pandemic, she said, residents did everything they could to keep the shops alive.

“They looked around and said, ‘If we don’t support the local we have, we’re going to have nothing,’” Ms. Sanders said.