Retention of Recent College Graduates by xuk33092

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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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