One North Pennsylvania St., Ste 1000, Indianapolis, IN 46204 (317) 237-2890 FAX (317) 237-2893 indianafiscal@covad.net
Press Release
April 5, 1999
The Indiana Human Capital Retention Project Series
Contact: Stan Jones, Indiana Commission for Higher Education, (317) 464-4400
Chris LaMothe, Indiana Chamber of Commerce (317) 264-6887
William Sheldrake, Indiana Fiscal Policy Institute (317) 237-2890
The Indiana Fiscal Policy Institute today released a major new report on the development of the Indiana workforce. Entitled Graduate Migration from Indiana’s Postsecondary Institutions, this report presents the results of an analysis of the migration of graduates from Indiana’s public two and four-year colleges and universities.
The report’s major finding as described in the study is:
▶ Indiana is a significant exporter of graduates with postsecondary degrees. For all degree levels, 36.2 percent of Hoosiers leave the State after graduation and 89.2 percent of non-residents leave. The State is also a significant importer of high school graduates pursuing a college education, but clearly the out-migration of both groups of graduates contributes to a “brain drain” or flight of human capital from Indiana.
A well-stocked supply of human capital is recognized as a vital part of maintaining a strong economy. States across the U.S. are paying more attention to both the development of human capital through their educational systems and the retention of that capital for future growth.
“There is no question Indiana must do much more to ensure an economic environment capable of outpacing the nation in the creation of more high skill, high wage jobs,” said Christopher P. LaMothe, president and CEO of the Indiana Chamber of Commerce. “The Indiana Chamber will continue to work to encourage needed policy solutions.”
As part of the assessment of Indiana’s human capital position, this report presents the results of an analysis of the migration of graduates from Indiana’s public two and four-year colleges and universities. The study surveyed public postsecondary graduates, both those who entered from outside the State to attend college and those who enrolled as Indiana residents. The sample included more than 8,000 graduates from the associate, baccalaureate and master’s levels. The study also included an analysis of a national sampling of baccalaureate graduates surveyed by the U.S. Department of Education in order to compare Indiana’s graduate retention with other states.
This report on migration in Indiana’s postsecondary graduates highlights earlier findings on human capital in Indiana. The demand for the graduates of Indiana’s colleges and universities is not sufficient, from the viewpoint of the graduates themselves, to retain them within the Indiana economy, and national data analyzed for the purpose of this study confirms the importance of economic factors in the migration decision. “We are doing an excellent job of producing higher education graduates, “ said Stan Jones, Indiana’s Commissioner for Higher Education. “But there’s no mystery here, it’s all about jobs.”
However, the findings do provide reasons for optimism with regard to affecting Indiana’s human capital position. Extending access to postsecondary education appears to significantly expand the human capital retained within the State. Designing policies to
accomplish this within the higher education delivery system in Indiana is part of solving Indiana’s human capital dilemma.
The report also notes other key findings:
▶ Indiana’s graduates leave the State, overwhelmingly, for employment-related reasons. Of those graduates who left, both those from outside the State and those who were Hoosiers, the strongest factor in leaving was the search for the right kind of job, the best pay/benefit mix, or the brightest prospects for career advancement.
▶ Quality of life is a factor in the failure to keep highly educated persons in Indiana. Those graduates who left the State cited quality of life as the second most important set of reasons to leave, [behind jobs]. However, this is a two-pronged finding. Those graduates who stayed also ranked Indiana’s quality of life as a secondary set of factors influencing them to remain in-state. The reasons behind each group’s ranking are not clear, but the importance of improving the perception of the quality of life for both career-motivated and family-motivated recent graduates shouldn’t be missed.
▶ Indiana’s public postsecondary institutions appear to produce baccalaureate level graduates in the subject area disciplines most likely to be needed in a manufacturing-oriented economy. Business degrees ranked first and engineering and technology ranked fourth in the choices of majors among survey respondents. However, only 58.8 percent of the business majors stayed in Indiana, and fewer, 36.7 percent, of the engineering and technology majors stayed in the State to pursue their careers.
▶ The State retains higher percentages of its master’s degreed persons [Indiana residents] than it does bachelor’s students, since master’s graduates are more likely to be employed in a career-related job when pursuing a master’s education.
▶ While Indiana’s major research universities serve a higher percentage of out-of-state enrollees, the program offerings at these schools are not driven by the choices of non-Indiana students. Degree program selections by Hoosiers are not significantly different than non-residents.
▶ Program level shifts in enrollment impact overall retention percentages. In 1985-86, the majority of the State’s master’s degrees in business administration were awarded at Indiana’s major research campuses, [58.5
percent]. By 1995-96 the number of MBA’s produced had grown by almost 50 percent. However, by that year only one-third of the MBA’s came from the State’s major research campuses and the statewide retention rate for master’s degrees in business had increased from 46.4 percent in 1985-86 to 66.8 percent.
The report issued today is the second product of the Indiana Human Capital Retention Project. The Project was formulated as a research response to Indiana's perceived human capital problem. It consists of six research initiatives, each of which looks at a different part of the human capital issue. The first, The Evolution of the Indiana Labor Force, 1968-1997, A Comparative Analysis, illustrated the differences between Indiana’s economic structure and the rest of the U.S. That report demonstrated the state’s long history of relatively low demand for individuals with postsecondary degrees.
“The study is an important piece of a bigger puzzle regarding why we do not keep a higher percentage of graduates in Indiana,” LaMothe said. “We will continue our study of what kind of jobs are available in Indiana, especially in the often unheralded small business community.”
Although the first two reports have not focused on remedial measures, many state policymakers are suggesting methods of dealing with Indiana’s human capital position. “We are moving forward with the Governor’s two-pronged approach to addressing the brain drain issue,“ said Jones. “The approach includes working to bring federal research
dollars to Indiana to spur job development in technology and medicine and creating a community college system for the state.”
The Project is funded by a grant from the Lilly Endowment, Inc., and receives additional funding from the Indiana Commission for Higher Education and the Indiana Chamber of Commerce. The research for the project is being carried out by the Indiana Fiscal Policy Institute with the assistance of academic and other independent researchers.
The Indiana Fiscal Policy Institute is a statewide non-partisan, non-governmental public policy research organization focusing on state and local revenue and expenditure issues in Indiana. Through its research on state pensions, education, and tax policy, the Indiana Fiscal Policy Institute has contributed to the progress on problems of both immediate and long-term policy interest to Indiana citizens.
Copies of the report can be obtained from the Institute at (317) 237-2890 or by fax request at (317) 237-2893. The report is also available on the Commission for Higher Education Web site at www.che.state.in.us.