Recent College Graduate Retention and Attraction: Regional Brain Drains and Brain Gains

August 2007

By Justin Sabrsula, Junior Project Manager

AngelouEconomics

With America 's continued movement toward a services-based economy, metropolitan regions throughout the country are becoming increasingly reliant on college graduates to grow their economic bases. While some communities can rely on local educational and research institutions to provide their human capital resources, other regions must continually import college graduates to fill high-end positions. As the recruitment of college graduates becomes more competitive with each passing year, regional economic developers often emphasize the importance of educating, attracting and retaining college-educated workers in their communities. To achieve these goals, cities and regions have focused primarily on quality of life strategies like promoting arts festivals, downtown redevelopment, and increased park space to improve their human capital base. But what truly drives the decision making process of college graduates when deciding whether to stay in a region or city or move? In this article, using the largest 16 MSAs in the U.S. as an example, we explore the reasons why regions should pay attention to college graduates, what criteria college graduates use to determine where to live and work, and what types of strategies regions can implement to effectively retain their college graduates.

Why regions should pay attention to college graduates

In addition to sustaining high-skilled workforces, college graduates bring income to a community. An analysis of the educational attainment of the largest 16 MSAs in the U.S. reveals that education levels influence median wages in a community, and drive wealth creation through the creativity and innovation of college graduates. Almost three-quarters of the variation in wages among these MSAs can be explained by education levels alone.

While no community would choose to build a regional economy without college graduates, many regions across the U.S. are facing such a challenge because of decreasing levels of educational attainment among their populations. The top MSAs in the U.S. face a variety of educational trends, ranging from continued increases in educational attainment from generation to generation to steady declines in educational attainment over time.

generation, including Boston , Seattle , Minneapolis , New York , Philadelphia , and Los Angeles . The second group, including Washington , DC , San Francisco , Chicago , Atlanta , Miami , and Detroit has higher educational attainment among the 35-44 age groups than in their populations as a whole, but the 25-34 age groups are less educated than previous generations. The third group is composed of cities in the Southwest (including Riverside-San Bernardino, Phoenix , Houston , and Dallas-Ft. Worth) that have lower educational attainment overall; more alarmingly, each successive generation is less educated than the one before it. While these regions are experiencing massive population growth, their lack of educational attainment will limit future high-wage growth opportunities. So how do regions facing myriad trends in educational attainment attract and retain college graduates? What reasons do college graduates cite that attract them to cities, and do these reasons actually stand up to scrutiny?

What criteria college graduates use to determine where to live and work

Typically, regions focus on quality of life strategies to attract recent college graduates. These include creating lively entertainment districts, increasing access to parks and recreational activities, and focusing on urban redevelopment strategies to provide a high quality of life for recent graduates. But the criteria that most influence college students to stay in a region after college or to move to another area are often different not only from the focus of economic developers, but also from what students tell economic developers about their motivation for staying in a region after college or moving to another place.

In interesting research from three regions across the country (Philadelphia, Boston, and Utah), stated and revealed preference surveys of recent college graduates have uncovered factors that college graduates are revealed by their actions to be important to their decisions to stay in the region they went to college or to relocate to another region. These include:

Job opportunity : While many regions focus on providing a high quality of life, without economic fundamentals such as perceived job availability, recent college graduates will not move to a location. This measurement includes college graduates' understanding not only of specific job opportunities that they are pursuing, but also the wage levels and opportunity for future career advancement in a particular region. The Philadelphia study notes that internships play a particularly important role in retaining college graduates by providing them with an entry into the regional labor market.

Affordability: Students make mixed statements about the importance of affordability in choosing their location after college, but their actions show that affordability of a region, in combination with job opportunities, are increasingly driving graduates' location decisions.

Housing: In addition to overall affordability, graduates state that housing affordability is not important in choosing a location, but their actions reveal that this is among the most important criteria in determining where to locate after college.

Geography: This measurement describes the proximity of college graduates not only to other cities but also to family and friends. Students are influenced by wanting to be close to families and also within regional and megapolitan labor markets which provide additional job opportunities.

Feel of the city: In this respect, quality of life strategies provide an excellent opportunity to increase the attractiveness of cities to recent college graduates. This measure includes not just how “urban” a city feels, but also its climate, diversity, arts and culture, opportunity for recreation, and entertainment and nightlife options. Graduates often say that this is the most important factor in their location decision, and their actions reveal that quality of life and the “feel of the city” are indeed important factors, though perhaps less important than specific job opportunities and affordability. 

Transportation: This factor was not cited by many recent college graduates as an important factor in their location decisions, but their actions indicated that the ease of automobile ownership, extensive and readily accessible public transportation, and short commutes increased graduates' likelihood of moving to or staying in a particular place.

These criteria provide economic developers with an overview of why college graduates stay or move to a particular location. Additional research into college graduate retention also reveals that native students are more likely to stay in the area where they've attended college. Graduates who attended high school in the same region or state that they attended college are very likely to stay in the same region after college. Almost 75% of Utah 's and 85% of Philadelphia 's native college graduates stayed in their respective regions after college. These regions are much less successful in retaining college graduates who moved to the region for college, with only 43% of Utah 's and 29% of Philadelphia 's non-native college students staying in the area after graduation. This points to the importance of keeping students in state for college in the first place. The Southern Technology Council also noted the following factors which make in-state employment after college more likely:

•   Foreign students subsequently employed in the U.S.
•   Majoring in a field other than engineering or physical sciences
•   Being older than average for their class
•   Attending a large college in a large metropolitan area

What types of strategies regions can implement for graduate retention and attraction

Given the importance of college graduates to the health of any regional economy, and knowing what criteria college graduates use to make their location decisions, regions must pursue specific strategies to attract and retain college graduates. For many, particularly including Houston and Dallas-Ft. Worth, marketing and branding can help college graduates to overcome negative stereotypes and focus on the areas that have been demonstrated to impact location decisions: these cities' job opportunities and affordability make them likely candidates for increased college graduate attraction. A wide variety of strategies, however, should be pursued by regions.

For regions and states with large college populations, retention of local students should begin not at the end of college, as traditionally assumed, but at the time when students are making college decisions: during their junior and senior years of high school. Making students more likely to stay in-state for college can be accomplished through college scholarship programs such as Georgia 's HOPE program or by focusing on keeping in-state tuition rates as low as possible. These strategies are an excellent investment in the future workforce of a region given that as many as 75-85% of native graduates stayed in their regions after college. Providing internships during college (64% of Boston graduates who interned locally chose to stay in the region) and keeping in-state tuition as low as possible provide economic developers with educational and workforce development strategies.