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The brain drain in Indiana is a myth

September 14, 2013
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It’s one of those statements so undisputed it requires no proof.

Indiana has a problem holding on to young people with bachelor’s degrees.

Everyone knows this is true.

But is it, really?

An IBJ analysis of surveys of the nation’s college seniors shows Indiana has less of a brain drain than most other states. Instead, what ails Indiana is the lack of a “brain gain” of educated adults.

The data up-end two popular notions that lie behind countless economic development initiatives over the past decade and a half.

First, that young people can’t wait to leave Indiana and exit the state in droves. Compared with other states, they do not.

Second, that Indiana is a magnet for mid-career professionals with families looking for cheap housing and low cost of living. Compared with other states, it is not.

Those findings should lead to an about-face by Indiana’s leaders, said Ball State University economist Michael Hicks.

Instead of fighting the brain drain by focusing on connecting young people with employers—as Lilly Endowment Inc., the Indiana Chamber of Commerce and Central Indiana Corporate Partnership have done—Indiana leaders instead need to focus on making more communities in Indiana attractive places for educated professionals of all ages, Hicks said.

“The brain drain efforts in Indiana have largely identified the wrong target and applied a lot of resources to it,” Hicks said. “The problem lies not in how many people we’re educating or how we’re educating them, but in having places that they want to live."

IBJ.COM EXTRA
Click here to read why college graduates in science, technology, engineering, mathematics and business leave the state.

There is plenty of evidence to show that a large chunk of college graduates do leave Indiana immediately after graduation. Of course, this is also true of every state in the nation.

The United States is a highly mobile society, and large numbers of young people leave their hometowns and states to seek fun and fortune.

This migration is even greater now than it was 20 years ago, according to the most recent data from the giant Baccalaureate & Beyond survey conducted periodically by the U.S. Department of Education.

So even as the brain drain has worsened in nearly all states, Indiana has done a better job than most of keeping its graduates.

Among students from Indiana who graduated in the 2007-’08 school year, 81 percent lived in Indiana a year later.

That performance ranked Indiana 11th best in the nation, out of 46 states for which the survey had enough data. The average retention rate among all states was 78 percent.

Indiana’s showing in those years was better than the two previous classes that were surveyed by the Baccalaureate & Beyond project.

The first survey found that 80 percent of college graduates from Indiana in the 1992-’93 school year were in Indiana a year later. But the national average back then was 82.5 percent, and Indiana ranked just 21st out of 38 states with adequate data.

Retention rates had dropped across the country by 1999-’00, the next academic year the Baccalaureate & Beyond study was conducted. Among college graduates that year, 77 percent of those hailing from Indiana remained in the state a year later, nearly identical to the average for all states.

Indiana’s performance that year ranked it 19th out of 42 states.

It is possible that Indiana’s ranking improved in 2008 and 2009 because of the recession, which made it harder than it had been in decades for young people to find work. But the percentage of Hoosier college graduates living with their parents in 2009 was no greater than the percentage across the country.

Indiana’s good performance in 2008 and 2009 was not completely out of character.

When the Baccalaureate & Beyond survey followed up with the 1993 graduates 10 years later, it found that 67 percent of college graduates nationally were in their home state.

brain drainBut 71 percent of Hoosier college graduates were living in-state a decade later. That ranked Indiana 5th out of 27 states with adequate data.

The data suggest Indiana has never done terribly at holding on to its college graduates. If anything, the recent efforts to get more graduates to remain in Indiana have improved what was already a decent rate of retention

But the data did not convince the organizations doing most to fight the brain drain that their mission has been accomplished.

“It is difficult to make true comparisons between how Indiana is doing now versus 20 years ago, but we know that our state still has a long way to go,” said Ronni Kloth, spokeswoman for Lilly Endowment, which has granted $57 million to Indiana colleges over the past decade to find ways to keep graduates in the state.

Now, Lilly Endowment is asking colleges for proposals to make a third round of grants in the program, which Lilly Endowment calls its Initiative to Promote Opportunity through Educational Collaborations.

“Indiana ranks very low in bachelor’s-degree-educated adults as a percentage of the adult working-age population,” Kloth added, “despite a steady supply of four-year college graduates, and it continues to have a low ranking in per-capita income.”

Indeed, Indiana ranks 42nd out of 50 states for the percentage of adults that hold a bachelor’s degree. About 23 percent of Hoosier adults have that much education, according to Census Bureau data, compared with a national rate of 28 percent.

Another piece of evidence that shows Indiana struggling in the game for educated talent is that per-capita personal income has been on a free-fall versus the rest of the nation for nearly 50 years. Hoosiers now earn an average of 85 cents for every dollar earned by the average American, after having peaked at 100.1 cents in 1965.

These poor rankings have persisted even though Indiana ranks No. 2 for net gain in college students. In 2008, for example, Indiana colleges attracted about 8,000 more students than the state saw leave to attend universities in other states, according to data from the National Center for Education Statistics.

“No matter how you count, we are doing pretty well at graduating people from colleges in Indiana and we are doing pretty poorly at actually having jobs for them,” said David Johnson, CEO of Central Indiana Corporate Partnership.

The shortfalls in educational attainment are real and significant, Hicks said. And, he added, it feels like a “brain drain” of young people is occurring in most parts of Indiana, because lots of young people do leave their home communities and move to places like Indianapolis and Bloomington.

But the real culprit for low education levels in Indiana is the state’s failure to attract as many educated professionals from out of state as most other states do.

According to the American Community Survey conducted annually by the Census Bureau, Indiana ranked 40th among all states in the percentage of adults who moved to the state from 2007 to 2011 with a bachelor’s degree—only 19 percent.

By contrast, 27 percent of adults moving to Illinois had a bachelor’s degree.

A 2011 analysis by Ball State University found the same thing among working-age adults. Looking at Census Data from 2006 through 2008, Ball State researchers found that 487,000 working-age people moved to Indiana, but that only 20 percent of them had a bachelor’s degree.

During the same time, 73,000 working-age Hoosiers left the state, and 37 percent of them had bachelor’s degrees, wrote Hicks and three of his Ball State colleagues.

“These numbers suggest,” they concluded, “that a larger and less-educated working-age population is moving into the state than is moving out of the state.”•

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  • The Past Will Never Return
    Fifty years ago, Indiana high schools produced the workforce for various manufacturing operations scattered across the state. Today, the majority of high schools in Indiana lack the ability to teach students math and engineering applications needed by companies utilizing high tech equipment in the company's manufacturing processes. Not every high school student attends college, and the cost associated with attending a trade school following high school is often too expensive for lower income families. Perhaps the State Employment Department should subsidize companies that agree to hire students entering trade schools, and offer tax incentives for companies that pay trade school training expenses for new hires.
  • Chambe of Commerce is a Den of Liars
    The Chamber of Commerce and prattling insistence they "can't find qualified workers!" is utter hogwash. They "can't find qualified workers" because they've chosen to fundamentally shift models from "hiring somebody with the right aptitudes and teaching them the specific skills of the job" to "hire only the person who already knows every single aspect of the job on day zero with no training whatsoever available." Naturally, this "selectivity" drastically reduces your pool of applicants, potentially to zero. To then whine and nag for lower minimum wage (i.e. another plum-perk from the government to business owners) is the height of hypocrisy. How about hiring people who can do the job and training them for how to work in your company? Start doing that and I guarantee they have better hiring luck. Or don't and just keep whining for more preferential treatment.
  • Higher paying jobs
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  • Jim F.
    The IN chamber has said for years businesses can't find qualified workers for their many open positions. Gov.s Mitch and Mike contend because of large tax cuts, RTWFL, regulatory rollbacks, geography and highways,low cost of utilities (re: coal based electricity) and living, that Indiana has the most business friendly climate in the Midwest. Given all these advantages, we still can't get unemployment down, or attract the talent from outside to fill the jobs they claim are available. Using the theory of markets, it would appear that these positions may not pay enough.
    • To Betrn'u
      To add to your good points, it may be worth noting that the unemployment rate for Hoosiers with college degrees is around 4%, suggesting full employment for that group. Indiana's problem with unemployment is not happening in this group, but in those with lower levels of education.
    • The Brain Drain is a Myth is a Myth
      So, the brain drain is a myth because graduates don't flock away from the state in the first year after they graduate. But graduates do leave later in much greater numbers than they are replaced by others moving in. So, do we need to come up with a new name for Indiana's inability to attract college graduates from other states? Any ideas? Brain Polarization? Brain Repellant?
    • Cause/Effect Still Not Clear
      I am still trying to sort out some of the conflicting data--wages down, skills gaps, graduates staying, limited opportunities, poor relative overall health, relatively low amounts of government assistance, regression social rhetoric, etc--to figure out where Indiana is headed. If you listen to the Governor the state is poised to go from "good to great" but I continue to wonder if he is living in reality. And, finally, I have to wonder about the reliability and completeness of the data that was used for this study.
    • Many reasons
      Many reasons why students leave or don't return, but this was very interesting. When traveling out of state over the years I have read articles in many communities concerned about brain drain. This confirms my suspicions. Increasing opportunities, building better communities and schools,along with toning down the social rhetoric could go a long way to help us attracting more educated young people.
    • Square the circle
      So, Indiana keeps as many grads as others, but the mantra for years is that companies constantly complain they can't find qualified workers for the hundreds or thousands of jobs they have available. At they same time, for many years (due to recession and many firms moving off shore), thousand of workers are crowding into technical and community colleges, and gov't retraining programs, presumably to qualify for the hundreds or thousands of jobs private companies tell us they have available. Still yet, our unemployment rate remains a full point above the national average, at 8.7%, but we can't attract folks with higher education from other places, to take the hundreds or thousands of jobs our citizens can't seem to complete the necessary training to qualify for. It would seem any savvy person from another state would flock to Indiana, because our folks can't seem to figure out that, in spite of attending continuing education in record numbers, they keep studying to get employment in something other than the hundreds or thousands of jobs our private sector has open.
      • All the smart writers must have left the state
        The author doesn't understand the brain drain & doesn't know what he is talking about.
      • Brain-For Real
        The critical question is what happens to the thousands of STEM grads every year. Their exit impacts Indiana across the board, as they earn six figures right out of school. Their purchasing power is then lost, because Indian's public policy has been to generate warehousing and hospitality industry jobs, above all else.
      • Rob
        According to 2011 data, Indiana is 15th is per capita cash welfare recipients. Too bad we treat our pro teams better than our populace. Based on this article, seems like Hoosiers could use some higher expectations and support.
      • Seriously?
        Did whoever wrote the headline bother to read the second half of the article? The last line in particular destroys the entire premise that the brain drain is somehow a myth. Plus wages are in "free fall"? Nope, nothing to see here, folks, 42nd out of 50 in college-educated adults is just dandy.
      • Low.cost of living
        Would make sense that our state attracts less educated adults since our cost of living is lower. Would be interesting to hear how our state ranks in government support for low/no income assistance compared to other states.
      • Brain Drain
        Interesting
      • Important Part Missing
        When discussing the topic of brain drain here in Indiana, one part gets often overlooked - the front end. Indiana is fortunate to have several outstanding 4-year public universities - IU, Purdue, Ball State can hold their own nationally. However, as they continue to escalate their tuition costs in a stagnate economy, more and more high school grads are getting out-of-state scholarship opptys with other fine institutions that are comparable to or better than the schools here. You go out-of-state, and strong chance you stay out. I have a daughter who went to a fine school school in Ohio, and her best scholarship offer was superior to what Indiana offered. She is now living and working out-of-state. And now, Indiana has for the third year in a row, dropped their automatic scholarship levels significantly, while raising tuition - again. My kids can now go out-of-state for less money than staying in state. Yet that is rarely discussed in the brain drain discussions.
      • Thx JK
        Thanks JK for devoting the time to put this together. Frankly, I've always thought it was an overstated issue - so this helps insert some balance in the discussion. And thanks, too, to Mr. Hicks at BSU. Have always been impressed with his informatics/stats work.

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