What are the most effective ways to combat “brain drain” across state borders?
Urban areas have been attracting people for well over a century in the US. More recently, cities with above-average levels of educated workers have experienced the highest economic growth rates, and are thus magnets attracting talent and new industry. Most of those urban areas have or are near, concentrations of higher education institutions.
Universities that draw out-of-state students can act as talent magnets if a good percentage of those students stay in the region following graduation. My own institution (William & Mary) is an example. Excellent out-of-state students have lots of national opportunities after graduating, but significant numbers choose to stay in the state because the state offers a wide variety of excellent career pathways for our graduates. If states do not want us to poach talented high school graduates, they need to offer a rich variety of educational opportunities to meet the wide variety of careers college graduates tend to pursue. This is made harder in states that think of their universities as a piggy bank to raid when the state needs revenue, or where the state plays politics with higher education in ways that make seeking education in that state — and living there afterward — unappealing to young people today.
Are highly educated states better able to withstand economic shocks?
The better question is about people, not states. The unemployment rate differs substantially by education level. As per the data from the St. Louis Fed on unemployment rates by education level from 2006 to today, more educated people are substantially less likely to be unemployed. The highest unemployment rates are concentrated among those with less than a high school diploma and the lowest rates are found among college and graduate-educated people. This is true over the long haul and during economic shocks. The 2008 financial meltdown raised unemployment among all groups but the shock was worst among the least educated. The pattern was also evident through the COVID shock, which was a very different type of recession.
Regions where a large fraction of the population is highly educated are thus more insulated from most normal economic shocks, and that means the tax base of those areas are less prone to crippling swings.
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