Loss of college graduates hurts Mississippi economically

THE TERM "BRAIN DRAIN" originated in the 1950s to describe the phenomenon of developing countries losing many of their "best and brightest" through emigration to Canada and the United States.

While it may not be a loss to the country as a whole, the loss of relatively well educated citizens from one U.S. state to another can create equally challenging hurdles for the donor state. The stock of "human capital" in a state is a very important determinant of future economic growth in the new "information age."

{}Evidence of brain drain 

Direct evidence of a brain drain is very difficult to obtain and requires data on exactly who is leaving the state and their educational level. Unfortunately current data is not readily available. There is, however, another way to examine this issue with data that sheds considerable light on this important issue for Mississippi.

For our discussion, let us consider the percent of the population with at least a bachelor's degree as an indication of the level of "human capital" within a state. (Certainly there are very bright individuals in a state without bachelor's degrees, and there are those with degrees who may show no outward appearance of having a brain.) Generally speaking, a state with a relatively larger number of individuals with bachelor's degrees or higher would, on average, have greater development potential.

The U.S. Census conducts an annual survey in which it estimates the percent of the population over age 25 with at least a bachelor's degree (along with a host of other demographic factors). In 2000, Mississippi had 17.7 percent of this population with a bachelor's degree, compared to the national average of 25.9 percent. In terms of national rankings, only West Virginia had a lower average (16.1 percent). Using this estimate, there were about 503,504 individuals in the state with at least a bachelor's degree in 2000.

In 2006, the estimated share of the population with a bachelor's degree in Mississippi had risen to 18.8 percent, third from the bottom (in front of Arkansas 18.2 percent and West Virginia with 16.5 percent). The U.S. average for 2007 was 27 percent.

Using the Census estimate for the 2006 population, the number of citizens age 25 or over with a bachelor's degree or higher had risen to 545,033, an increase of 41,529 individuals. It would appear that there has been no brain drain since our stock of "human capital" had actually increased between 2000 and 2006.

{}Degrees in Mississippi

The discussion above ignores the fact that during this seven-year period the state produced 108,268 college graduates in its public and private colleges and universities.

If all of these university graduates remained in the state, and no residents with bachelor's degree or higher left the state over the period, Mississippi would have added these graduates to its stock of "human capital," producing a total stock of human capital equal to 611,172 individuals.

(Note: It is unrealistic to assume all college graduates will remain in a state. This assumption only allows us to establish a theoretical "potential" for 2006.)

Using the percent of the population age 25 or over higher with at least a bachelor's degree for 2006 (18.8 percent) and the estimated 2006 population, the state had a total of 545,033 individuals in this category. The difference between the theoretical potential (611,172) and the actual (545,033) is 72,623. In other words, Mississippi only added one-third of the total number of graduates it produced to its stock of human capital.

National data shows that those individuals who migrate to other states tend to be younger and better educated than those who remain. The inevitable conclusion is that a relatively large number of individuals graduating with college degrees are not staying in Mississippi. And that represents a "brain drain" even if the absolute total of graduates is increasing.

{}Turning the corner

If all the college graduates produced between 2000 and 2006 in the state's colleges and universities remained in the state (an unlikely and unreasonable prospect), the percent of the population with a college degree would increase from 18.8 percent to 22.7 percent. While this would be a welcome change, Mississippi's 2006 ranking would rise from 48th to 40th place, still well below the U.S. average of 27 percent.

Mississippi's "human capital" problem is therefore twofold:

1. We do not produced enough college graduates for us to make significant progress relative to our sister states, and:

2. Mississippi does not retain a significant portion of our most recent graduates.

Improving the stock of human capital in Mississippi will determine the long run economic fate of Mississippi.

Bill Gunther is a professor of economics and director of The Bureau of Business and Economic Research at the University of Southern Mississippi. Contact him at william.gunther@usm.edu