Numbers, Facts and Trends Shaping Your World

States Work to Plug ‘Brain Drain’

by Pauline Vu, Staff Writer

A “brain drain” problem is plaguing a number of states in the Midwest, Great Plains and Northeast. Young, educated people flee, taking high tax revenues and economic potential with them.

To reverse the loss of such a valuable asset, states are trying solutions that veer from granting financial incentives to stay, to trying to create jobs to keep and attract new workers, to improving the quality of life for young people.

The problem for states is there’s no sure-fire solution.

“There is an argument of what comes first – the businesses who hire the graduates, or the graduates who lure the businesses? I don’t think the research on that is definitive,” said Dan Hurley, the director of state relations and policy analysis for the American Association of State Colleges and Universities.

Maine will become the first state to give future college graduates a hefty tax credit to help pay back their student loans if they stay and work in the state. The incentive could amount to a yearly tax credit of just under $5,000 a year over the course of 10 years.

But will it work? Yes, says Andrew Bossie, a recent University of Southern Maine graduate who led a successful grassroots effort that convinced lawmakers to pass the tax incentives this year. Several friends wanted to stay in Maine but had to leave for higher-paying jobs elsewhere to begin paying off their loans, Bossie said.

“The economy is going to have the benefits of a more-educated workforce,” Bossie said. “It’s a really smart way to get more bang for our buck.”

But others question whether financial incentives alone will keep the young from leaving.

Bruce Vandal, the director of post-secondary education and workforce development for the Education Commission of the States, a nonpartisan think tank, pointed out that if the jobs aren’t there for graduates, “There’s no reason … they would stay, even with the financial incentives.”

Many rural states have a natural disadvantage when it comes to a quality of life that appeals to the young. They don’t have Colorado’s ski slopes, California’s beaches or the glamour of cities such as Atlanta and Las Vegas. Omaha, Neb., has been ranked by Forbes and Money magazines as one of the country’s best cities to live in, and yet young people who live there often feel the need to leave, said Richard Baier, Nebraska’s director of economic development.

“It’s part of the ‘big-city syndrome,’” Baier said. “It’s a cultural thing.”

According to a U.S. Census Bureau report, states that lost the biggest percentage of single, college-educated residents ages 25 to 39 from 1995 to 2000 were North Dakota, Iowa and South Dakota. At least 33 states were “net exporters” of young people, or lost more of that demographic than they gained.

The beneficiaries were in the West and South, home of the top 10 states that took in more young people than they lost. Nevada, Colorado and Georgia – with major cities such as Las Vegas, Denver and Atlanta – led the list.

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