1. Issues and Strategies for Improving the Regional Workforce: Fighting 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

2. The National Context: Slowing 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

3. 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

4. The Midwest labor force looks very different across age groups. Source: www.bos.frb.org/economic/neer/neer2000/neer100c.pdf

5. Alternative strategies for attracting college graduates Grow your own and retain Import from elsewhere Source: www.bos.frb.org/economic/neer/neer2000/neer100c.pdf

6. “Grow your own” is the dominant strategy nationwide… Source: www.bos.frb.org/economic/neer/neer2000/neer100c.pdf

7. “Grow your own” is the dominant strategy nationwide… Source: www.bos.frb.org/economic/neer/neer2000/neer100c.pdf

8. “Grow your own” is the dominant strategy nationwide… Source: www.bos.frb.org/economic/neer/neer2000/neer100c.pdf

9. “Grow your own” is the dominant strategy nationwide… Source: www.bos.frb.org/economic/neer/neer2000/neer100c.pdf

10. and even more dominant in the Midwest. Source: www.bos.frb.org/economic/neer/neer2000/neer100c.pdf

11. and even more dominant in the Midwest. Source: www.bos.frb.org/economic/neer/neer2000/neer100c.pdf

12. “Brain Drain” is a hot topic because college graduates are so mobile, compared to high school graduates. Source: www.bos.frb.org/economic/neer/neer2000/neer100c.pdf

13. The Midwest has a pretty typical rate of “brain outflow” but a very low 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 Central25.6 percent U.S. Average23.5 percent Percent gained via in-migration from other regions: East North Central 9.8 percent U.S. Average23.5 percent (Sample of about 1,000 graduates). Source: www.bos.frb.org/economic/neer.neer2001/neer101b.pdf

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

15. Midwest families have a tradition of geographic stability. Source: www.bos.frb.org/economic/neer.neer2001/neer101b.pdf; National Longitudinal Study of Youth.

16. Midwest economic indicators and amenities are mixed. Source: www.bos.frb.org/economic/neer.neer2001/neer101b.pdf

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

18. Conclusions 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” ???