A quick scan of states shows that North Dakota is hardly alone
in its desire to do something to stem the loss of educated young
Pennsylvania, for example, is spending $12 million on an initiative
called "Stay Invent the Future" that's aimed at reversing
outward migration of college-educated folks believed to be upwards
of 10,000 annually. Part of the money went to a nationwide TV ad
campaign to woo workers back home that featured a joe-six-pack "fairy
job mother" wearing a tutu, wings and construction boots.
In Nebraska, an Omaha billionaire established a scholarship program
a couple of years ago in hopes of keeping up to 150 of the brightest
engineering and computer-science students who often went to out-of-state
Other district states also tried getting on the bandwagon. Nestled
in a larger proposal dubbed "Build Wisconsin," then-governor
Scott McCallum sought loan forgiveness for college graduates who
remained in state, as well as the creation of a state office of
student retention responsible for conducting a year-round campaign
to try to keep students in Wisconsin.
A few years ago the South Dakota Legislature tried to enact a so-called
scholar program designed to keep college-aged students in South
Dakota for their higher education experience. According to a source
with the state Board of Regents, the proposal started with fairly
broad support, "but it got bogged down" over whether the
scholarships could legally go to both public and private institutions.
The goal of these and other brain drain programs "is to keep
the best and brightest from high school from leaving the state,"
according to Tom Mortenson, head of Postsecondary Education Opportunity,
a small policy firm in Oskaloosa, Iowa. "In a narrow sense,
I understand what states are doing. They are proud of the talent
raised there and they don't want to lose it."
Whether any of these programs is effective at addressing brain drain
is largely unknown because very little research has been done on
the issue of brain drain itself, to say nothing about the efficacy
of policy responses to the problem.
But programs commonly designed to combat brain drain demonstrate
two shortcomings: First, the small scale of most brain drain programs
suggests that if there is any effect, even cumulatively, it is likely
marginal. Second, the many facets of demand for workerslocal
vs. national markets, skill types, comparative wagesare not
often connected to or aligned with the supply of graduates coming
from local colleges and universities. As a result, brain drain programs
tend to keep priming the supply pump when closer attention to the
demand engine might prove more useful.
When it comes to brain drain programs, according to Paul Gottlieb,
a Rutgers University economist, "if you ignore the demand side,
you will fail."
|PERCENT OF POPULATION 25 YEARS AND
OLDER WITH AT LEAST A COLLEGE DEGREE
Source: U.S. Census Bureau
A study by two economists at the University of Wisconsin-Oshkosh
looked at the seemingly large out-migration of graduates from that
school, particularly those in high-demand technology fields. It
pointed out that if the state is producing too few math and science
graduates supposedly sought by high-tech employers, then those who
are produced should find a ready-made job market in state.
But the report found that math and science graduates were 50 percent
more likely to leave the state than those in other fields. "This
suggests that it is not the supply of high-tech workers, but the
demand for them, that is the problem."
Designing a public policy response in this case is difficult because
the cause-effect of brain drain is hard to pin down. Economist Kevin
McGee, one of the study's authors, pointed out that the highest
emigration rates were in technical fields. "[T]hat might imply
a failure in Wisconsin to create technical employment opportunities,"
he responded via e-mail, or "it might also just imply that
those fields have greater overall [job] mobility."
Either way, brain drain among technical graduates at UW-Oshkosh
appears to be a function of demand: Either slow local demand or
high external demand (or a combination) is causing these graduates
to leave. Yet this perspective is often absent when it comes to
addressing the brain drain problem.
Gottlieb conducted a brain drain review for the Ohio Board of Regents
and the Greater Cleveland Growth Association. "My funders were
already doing brain drain programs" like scholarships, Gottlieb
said. "I didn't want to offend my funders, but I really kept
thinking these policies were misguided and just moving bodies around."
He was quick to point out that some supply-based policies are economically
sound. "They are not necessarily stupid or bad ideas. ... They
are all broadly justifiable in economic terms." But Gottlieb
added, "Supply-side [programs], my gut tells me, is a drop
in the bucket."
States already have a broad network of policies targeting the supply
of graduates, including tens of billions of dollars in expenditures
on higher education and student financial aid. As such, Gottlieb
said, new supply-based programs "are add-ons, marginal and
incremental on top of everything else they're doing."
He acknowledged that programs that "bring our sons and daughters
home" are politically popular but said they "are almost
certainly not to scale" to have much of an impact. For example,
it's common for a state or region to identify brain drain as a problem,
"and a couple of foundations will belly up to the bar and ante
up a million dollars for scholarships." That's small potatoes
to Gottlieb. Real impact on the supply side would be upping higher
education spending by, say, 20 percent. "Now you're talking."
Fried chicken, runny eggs
That might sound counterintuitive: pumping money into higher education
to increase the supply and quality of graduates, when demandgood
jobs for these graduatesappears to be the bigger issue. Part
of the rationale is pragmatic.
|HIGHER EDUCATION SPENDING
Source: Measuring Up 2002, National
Center for Public Policy and Higher Education
"The state can't very easily do anything about the demand
for graduates," according to McGee, "but it does have
considerable control over the supply. And it is after all the supply
that is the major state budget outlay."
Moreover, many believe the best way for states to influence local
demand for high-skilled workers is to turn the supply spigot for
college graduatesand related public spendingwide open.
Welcome to the world of economic development in the new economy.
Research shows that at every economic unitindividuals, families,
cities, regions, states, even countriesincome is proportional
to educational attainment. Mortenson, the policy consultant, said
states fail to understand that "the only people making it are
those with some, and hopefully a lot, of higher education."
For those who can't or don't adapt to a high-skills economy, "there
are consequences," he said. "If you want to be poor, forget
about higher education."
Research also shows that thriving regions tend to have concentrated
levels of highly educated workers, particularly in high-tech fields.
The key to winning and losing in the new economy, and the best way
to reverse net out-migration, according to Gottlieb's Ohio report,
is to "create successful high-tech agglomerations." Without
this concentration of talent, "programs like tuition clawbacks
will only be marginally effective. ... They will inevitably target
some individuals who would stay anyway, while bribing others to
remain for a period that is all too brief."
Those agglomerations occur in part through a strong and vibrant
higher education system, complementedor possibly ledby
an entrepreneurial culture. Both are a necessity, but which one
precipitates the other is a matter of heated debate. Gottlieb acknowledged
as much in his report, but argued that this dynamic rendered the
brain drain issue mostly moot. "In the chicken-and-egg debate
over what comes firstsmart people or entrepreneurial growthit
is not clear that reducing out-migration is the most important egg."
Mortenson pointed out that there is an upside for states like North
Dakota and Iowa that are large exporters of graduates. He pointed
out that these states also import a lot of students, which gives
them a strong position in higher educationitself a high-growth
industryand provides the developmental underpinnings for high-skill
Ironically, states are finding themselves in something of a Catch-22:
They want to keep more students in state, as well as attract more
nonresident students. They will likely get their wish because the
demographic bulge known as the echo boom (or millennium generation)
is starting to go to college. From 1999 to 2010, the Department
of Education projects that postsecondary enrollment among those
under the age of 25 will increase by 21 percent.
But at the same time, broad-based access to universities is getting
tougher, as schools are ratcheting up admission standards in a race
for quality. States across the country are also staring at large
budget deficits, and higher education spending has been and will
likely continue to be affected. These two factors have helped produce
double-digit increases in annual tuition rates.
In Wisconsin, budget cuts last year prompted a hiring freeze by
the UW System, which has already had a ripple effect. Despite growing
enrollments nationwide, UW-Madison's enrollment actually declined
this fall by about 1,000 students. Other Wisconsin state universities
were worried about taking on more students without proportional
increases in state support.
That doesn't appear very likely, given a current state deficit estimated
at $3 billion. The threat of additional higher education cuts is
now colliding with a surge in enrollment. According to system officials,
applications to the UW System for fall 2003 are up better than 20
percent over this time last year and are up at every campus.
The widespread budget dilemma for many states, combined with a popular
brain drain notion that much of the investment in educating young
people ultimately hits the freeway for a job elsewhere, is creating
a lot of pressure to rein in higher education spending.
That would be penny-wise and pound-foolish, according to Gottlieb.
States should not "ratchet down" higher education spending
or capacity "simply because you discover that you are educating
other states' technology workers ... [that] would be a huge mistake.
The role of university capacity in creating high-tech agglomerations
is simply too important."