The Real Cause of Brain Drain

Tim Goral's picture
Monday, May 6, 2013

Bright, talented and well-educated young people across Indiana will soon pack up their meager campus belongings and head out to new jobs. Their employment prospects, for the minority who don't yet have jobs, are fantastic. The March unemployment rate among those with a bachelor's degree or higher was 3.8 percent, even though they are in the labor force at a rate 63 percent higher than their non-graduate peers.

While the popular media worries a lot about college graduates in these economic climes, labor markets seem unperturbed about their prospects. We probably ought to save our worries for other problems.

Within the Midwest, we hear a continued lament about the "brain drain" and the shortage of key science, technology, engineering and math (STEM) graduates. To remedy this, our state rewards schools for producing more such graduates, and inadvertently incentivizes them to bring in more out-of-state students for these programs. Rarely in the annals of public policy have we so misdiagnosed a problem and so assuredly applied the wrong medicine.

To be clear, brain drain is a genuine problem in Indiana. In fact, we lose thousands of graduates (STEM and otherwise) from our universities to other states every year. Instead of slowing this trend, our higher education financing policies accelerate this problem by pushing more students into majors that are in demand elsewhere. That is the bitter (and expensive) medicine taxpayers, students, businesses and universities are forced to swallow.

Brain drain in Indiana is neither a problem of our universities nor a result of our business relocation efforts. Indiana Economic Development Corp. is connecting with a record share of new job creators, successfully touting the truth about our great fiscal and regulatory environment.

Our problem is not in the immediate domain of our schools, economic developers or marketers. The problem of brain drain is a good bit simpler than that. It is in our communities.