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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/.
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