issues and strategies for improving the regional workforce: fighting brain drain yolanda k....

Issues and Strategies for Improving the Regional Workforce:Issues and Strategies for Improving the Regional Workforce:

Fighting Brain DrainFighting Brain Drain

Yolanda K. Kodrzycki

Assistant Vice President and Economist

Federal Reserve Bank of Boston

presented at the conference on

Assessing the Midwest Workforce

co-sponsored by

The Federal Reserve Bank of Chicago and

The Gerald R. Ford School of Public Policy at the University of Michigan

The National Context: The National Context:

Slowing Increases in the Supply of College Educated WorkersSlowing Increases in the Supply of College Educated Workers

• In recent years, rates of college completion have increased only slightly among new labor market entrants.

• Given the current age mix of the population and reasonable assumptions about immigration, overall labor force growth is expected to be much slower from 2000 to 2020 than it was between 1980 and 2000.

• Combined, these statistics imply a slowing in labor force quality growth in the coming decades.

Elwood (2001) -- Fraction of the labor force with a four-year college degree:

21.8 percent in 1980

30.2 percent in 2000

31.7 to 35.2 percent in 2020

• The competition to attract college graduates is likely to heat up, not cool off.

Source: www.bos.frb.org/economic/conf/conf47/kodrzycki.pdf

Why do regions have different proportions of college graduates?Why do regions have different proportions of college graduates?

• The proportion of the labor force with a college degree is determined by a variety of factors:

- Quality and accessibility of educational institutions

- Availability of jobs that make use of advanced skills

- Cost of Living

- Amenities and disamenities

• Both the past and present state of educational options, work opportunities, and quality of life matter.

Source: www.bos.frb.org/economic/neer/neer2000/neer100c.pdf

The Midwest labor force looks very different across age groups.The Midwest labor force looks very different across age groups.


Percentage of Persons 25 Years and Over with aBachelor’s or Higher Degree, by Age Group, 1998.

United States East NorthCentral

25 to 34 27.7 28.2

35 to 44 26.3 24.0

45 to 64 26.1 24.1

65 and over 15.0 10.9

Total 24.5 22.5

Alternative strategies for attracting college graduatesAlternative strategies for attracting college graduates

• Grow your own and retain

• Import from elsewhere


““Grow your own” is the dominant strategy nationwide…Grow your own” is the dominant strategy nationwide…


Percent of 31- to 41-Year-Olds with Bachelor's Degree, by Migration Status, 1996

0

5

10

15

20

25

30

United States East North Central

Non-Migrants Adult Returnees College In-Migrants Adult In-Migrants

and even more dominant in the Midwest.and even more dominant in the Midwest.


Percent of 31- to 41-Year-Olds with Bachelor's Degree, by Migration Status, 1996

0

5

10

15

20

25

30

United States East North Central

Non-Migrants Adult Returnees College In-Migrants Adult In-Migrants

““Brain Drain” is a hot topic because college graduates are so mobile, Brain Drain” is a hot topic because college graduates are so mobile, compared to high school graduates.compared to high school graduates.


The Midwest has a pretty typical rate of “brain outflow” but a very low The Midwest has a pretty typical rate of “brain outflow” but a very low rate of “brain inflow.”rate of “brain inflow.”

Five-year migration rates across regions for college graduates in the classes of 1979 to 1991, by high school location show:

Percent lost via out-migration to other regions:

East North Central 25.6 percent

U.S. Average 23.5 percent

Percent gained via in-migration from other regions:

East North Central 9.8 percent

U.S. Average 23.5 percent

(Sample of about 1,000 graduates).

Source: www.bos.frb.org/economic/neer.neer2001/neer101b.pdf

Why do recent college graduates move away from their home states?Why do recent college graduates move away from their home states?

• Prior movers are especially likely to move again.

• Poor economic conditions in home state induce out-migration.

- Low employment growth or high unemployment rate

- Low pay for college graduate

• People from a seacoast state are less likely to move away.

• Housing costs are insignificant (at least for recent college graduates).

(Sample of about 1,000 graduates).


Midwest families have a tradition of geographic stability.Midwest families have a tradition of geographic stability.

Source: www.bos.frb.org/economic/neer.neer2001/neer101b.pdf; National Longitudinal Study of Youth.

Midwest economic indicators and amenities are mixed.Midwest economic indicators and amenities are mixed.


State Rankings for Selected Variables Used in Regression AnalysisAnnual Averages

EmploymentGrowth

(1 = high)

Unemployment

(1 = low)

Seacoast

(1 = yes)

CollegeGrad Pay

(1 = high)

MedianHome Price

(1 = low)

Illinois 41 42 0 12 31

Indiana 31 37 0 34 9

Iowa 36 16 0 41 3

Michigan 35 50 0 10 12

Ohio 40 43 0 19 19

Wisconsin 26 28 0 23 22

Where should Upper Midwest employers recruit college students?Where should Upper Midwest employers recruit college students?

• West Virginia employment rank = 50, unemployment rank = 51, no seacoast, college pay rank = 43

• Arkansas unemployment rank = 44, no seacoast, college pay rank = 50

• Nebraska and the Dakotas no seacoast, college pay rankings between 46 and 51


ConclusionsConclusions

1. Pay attentions to “growing your own” via educational opportunities.

• This is the most important source of college graduates for all regions of the country and a traditional strength for the Midwest.

2. Continue to develop attractive job opportunities for college graduates.

• “Brain outflow” from the Midwest is not unusually large.

3. Consider whether to pursue “brain inflow” strategy.

• Few college students or college graduates move to the Midwest from other regions of the country.

• Ad campaign: “It’s not your grandparents’ Midwest” ???

issues and strategies for improving the regional workforce: fighting brain drain yolanda k....

Documents