Retention of Recent College Graduates
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Policy Brief New England Public Policy Center at the Federal Reserve Bank of Boston January 2009 09-2 Retention of Recent College Graduates in New England New England Public by Alicia Sasser Policy Center Director The population of recent college gradu- report, this policy brief outlines some basic Robert Tannenwald ates has been growing more slowly in New facts about the retention of recent college Deputy Director England than in the rest of the United graduates. It shows, for example, how New Darcy Rollins Saas States. Since 2000, the number of indi- England stacks up compared with other re- viduals aged 22–27 years with a bachelor’s gions, what factors affect its ability to retain Staff degree or higher has risen only 8.7 percent graduates, and the reasons why recent col- Heather Brome in New England—roughly half the national lege graduates choose to leave New Eng- Robert Clifford increase. “Factors Affecting the Supply of land. These findings can help policymakers, Tom DeCoff Recent College Graduates in New Eng- business leaders, and college officials weigh Michael O’Mara land,” a related policy brief, shows that the effectiveness of policy options and col- Mary Pierotti most of this slower growth reflects the fact lective actions that aim to retain recent col- Alicia Sasser that the region has experienced lower fer- lege graduates. Yael Shavit tility rates, leaving fewer native students Jennifer Weiner of college-going age. Fortunately, because How does New England compare Bo Zhao a growing share of these individuals is at- with other regions? The New England Public Policy tending college, the region’s slower growth Some New England leaders are concerned Center is dedicated to enhancing is better than it would have been otherwise. that, despite a high rate of educational at- access to high-quality analysis on Yet New England states are still concerned tainment, the region retains too few college economic and public policy issues that an inadequate supply of skilled workers graduates—or at least fewer than it did in that affect the region. may hamper economic growth. the past. In fact, migration patterns have One of the most immediate ways a re- changed little over time for this group. Still, For more information about the gion can increase its population of recent the situation is more complex than it might New England Public Policy Center, college graduates is by trying to influence appear. please visit: www.bos.frb.org/ their migration decisions. This can be For example, typical migration rates for economic/neppc/ achieved either by retaining graduates ed- New England often show net out-migration ucated within the region, or by attracting among recent college graduates—meaning The views expressed are the authors’ and not necessarily those those who received their degrees elsewhere. that more individuals appear to be leaving of the Federal Reserve Bank of Retention is especially important in New than entering the region. However, such Boston or the Federal Reserve England because it imports a relatively high rates reflect only moves made upon gradu- System. share of its student body—about 30 percent ation from region of institution to region of of the incoming class each year—from other adult residence, failing to capture the earlier parts of the country. in-migration of students to attend college. federal reserve bank of boston TM Policymakers and business leaders in Why is that important? New England every New England state are beginning attracts a relatively high share of students to focus on retaining more recent college from outside the region, with more students New England Public Policy Center graduates educated within their borders. arriving to attend college than leaving to at- Drawing on the findings of The Future of the tend college elsewhere (see Table 1, column at the Federal Reserve Bank of Boston Skilled Labor Force in New England: The Supply 2). Even though the region holds onto only of Recent College Graduates, a recent NEPPC a fraction of those incoming students after they graduate, they more than offset the num- likely reflecting the strength of the region’s ber of graduates who do leave, so the region academic and professional services sectors. In comes out ahead for a given class. contrast, only 64 percent of science/technol- However, although this phenomenon ogy/engineering/ and mathematics majors re- adds to the number of recent college graduates mained in New England after graduating. Al- with each graduating class, New England re- though this is certainly a concern, it is perhaps tains a lower share of students upon graduation not surprising, as these individuals are in high than other regions. For the graduating class demand throughout the country. of 2000, 70.5 percent of recent college gradu- ates were still living in New England one year What factors affect the region’s ability after graduation, compared with 79.9 percent to retain recent college graduates? for the Mid-Atlantic region and 87.5 percent New England’s lower retention rate partly re- for the Pacific region (see Table 1, column 2). flects the high share of non-native students This pattern has changed very little since the who migrate into the region to attend school. early 1990s. Having already migrated once to attend col- In addition, the share of a given class of lege, these students have a higher propensity college graduates that a region retains declines to relocate after graduation—often to return over time, but less so in New England than home—whether to take a job or be closer to most other regions. For the 1993 graduating family. For example, only 23 percent of those class, the share of college graduates who stayed migrating into the region to attend college in New England fell from 67 percent one year were still living here one year after gradu- after graduation to roughly 60 percent 10 years ation, compared with 91 percent of native out. Only the West fared better: its retention graduates. And New England’s retention of rate fell by just 5 percentage points. non-native graduates is relatively low. So, Finally, New England ranks near the bot- besides having a greater share of non-native tom in retaining graduates in most fields. How- graduates, New England is less likely to re- ever, health care is an exception: more than 90 tain them than other regions (see Table 1, percent of this field’s graduates remain in New columns 3 and 4). England. Graduates in some other fields also The high share of students graduating had retention rates above the region’s overall from private and very selective institutions in average. For example, nearly 77 percent of New England also lowers the region’s reten- education majors and 73 percent of business tion rate. For a given class, more than half majors stayed in the region after graduation— of recent college graduates in New England Table 1. New England attracts a relatively high share of non-native students, many of whom leave the region when they graduate. Share of graduates living in same region Share of college as B.A. institution one year after graduation students who Non-native Native are non-native All graduates graduates graduates New England 28.5% 70.5% 22.7% 91.0% Mid-Atlantic 14.3% 79.9% 28.6% 88.7% East North Central 11.6% 79.7% 18.0% 87.8% East South Central 15.5% 72.2% 15.3% 82.8% South Atlantic 16.2% 79.1% 29.2% 89.1% West North Central 18.4% 74.9% 21.5% 86.9% West South Central 9.4% 85.1% 24.2% 91.4% Mountain 14.2% 76.4% 26.2% 84.8% Pacific 6.0% 87.5% 32.3% 91.0% Source: 2000/01 Baccalaureate and Beyond Longitudinal Survey, NCES, U.S. Department of Education. Note: Data are for the graduating class of 2000 unless otherwise indicated. 2 Figure 1: The high share of students graduating from private and very selective institutions, who are more likely to migrate than other graduates, also lowers the region’s retention rate. Share of graduates living in same region as BA institution one year after graduation Percent 100 Public Private Very Selective 80 60 40 20 0 New Mid- East North East South South West North West South Mountain Pacific England Atlantic Central Central Atlantic Central Central Source: 2000/01 Baccalaureate and Beyond Longitudinal Survey, NCES, U.S. Department of Education. Note: Data are for the graduating class of 2000. earned their degree from a private or a very Why do recent college graduates leave selective institution—a far higher share than New England? in most other regions. These graduates, able These individuals are voting with their feet— to reap the benefits of their high-quality edu- they have decided to relocate based on a va- cation by moving to any number of locations, riety of factors. Those include economic have low retention rates in general across all factors, such as the availability of jobs, com- Census divisions. For example, only 59 per- pensation levels, and the cost of living; and cent of students graduating from private insti- non-economic factors, such as proximity to tutions in New England were still living in the family, educational opportunities, and local region one year after graduation, compared amenities such as weather, culture, and recre- with 86 percent of graduates of public institu- ational activities. tions (see Figure 1). Contrary to conventional wisdom, recent However, as with non-native graduates, college graduates are leaving New England New England’s retention rates for graduates primarily for job-related reasons—not hous- of private and very selective institutions are ing costs. According to the Current Popula- lower than those of other regions. For ex- tion Survey, about half of those leaving New ample, only 56 percent of students graduat- England during the past decade cited employ- ing from very selective institutions in New ment-related reasons. Just under one-third England were still living in the region one year left for “other” reasons—almost exclusively to after graduation, compared with 75 percent attend or leave college—reflecting the large of graduates in the Mid-Atlantic region (see share of non-native students who leave upon Figure 1). So, besides having a greater share graduation. Another 17 percent left for family- of graduates from private or very selective related reasons, such as a change in marital institutions—who have low overall retention status or to establish their own household. In rates—New England is less likely to retain contrast, housing-related reasons accounted those graduates than other regions. for less than 2 percent of moves from New England among recent college graduates (see Figure 2). 3 Figure 2: Recent college graduates leave New England primarily for job-related reasons– few cite housing as their motivation. Primary reason for leaving among recent college graduates by region of origin Percent 100 80 60 40 Employment Leave/Attend School Family Housing 20 0 New Mid- East North East South South West North West South Mountain Pacific England Atlantic Central Central Atlantic Central Central Source: Author’s calculations from the Current Population Survey, 1999-2007. On second glance, this is perhaps not sur- Still, contrary to the usual reasons offered prising, given that recent college graduates are to explain why individuals leave the Bay State, more likely to be seeking rental rather than recent college graduates appear to be moving owner-occupied housing. “The New Eng- primarily to seek the best job opportunities. land Rental Market,” an earlier NEPPC policy That suggests that states can take tangible brief, showed that rental housing, unlike own- steps to retain more recent college graduates. er-occupied housing, is relatively affordable in One potential solution is to build stronger New England compared with other regions. ties between colleges and local employers, to Indeed, the Mid-Atlantic and Pacific regions— help graduates, particularly non-natives, learn both with relatively high housing costs—were about local job opportunities and form net- two of the three top destinations for recent works in the region. For example, the Colleges college graduates leaving New England. of Worcester Consortium in Massachusetts has expanded internship opportunities through an What can states do to retain recent online regional database that students can tap college graduates? into from any of the consortium’s 15 member In some sense, New England is a victim of its institutions. Internships create a win-win-win own success. The region’s colleges and univer- situation, because they allow students to try sities excel at producing highly skilled college out a job or firm, lower recruiting costs for em- graduates who are likely to have job opportu- ployers, and enhance the reputation of a col- nities in any number of locations. Yet New lege or university. England will likely face even greater competi- And as Bentley College economics profes- tion for college graduates in the future—par- sor Patricia Flynn observed in the Boston Globe ticularly in a global economy where workers earlier this year, “Being offered a really good and jobs are more mobile. job will override housing costs, snow, and a lot of other issues.” This policy brief describes findings from The Future of the Skilled Labor Force in New England: The Supply of Recent College Graduates, by Alicia C. Sasser, a senior economist at the New England Public Policy Center. The full report, including more information for each New England state, is available at http://www.bos.frb.org/economic/neppc/.