1 The Location Decision of the Highly Educated: A Statewide Analysis Sarah Wakefield

2 Motivation New Location Theory – Less focus on business, more on people Impact on State Economies – Observe positive impacts Develop Strategies to Attract Talented Individuals – Talented: Bachelor’s degree and higher

3 My Contribution Analysis at a statewide level Inclusion of explanatory variables such as park visitors and number of libraries Analyze the effect of net migration with patent data

4 Research Questions: What factors attract talent at the state level? Does the relevance of each factor change as education level increases? Is there an observable positive impact on state economies?

5 Literature Review Kodrzycki (2001) – location decisions of the college educated – Positive net migration of recent college graduates into South Atlantic, Mountain, & Pacific regions – New England, East & West North Central, and East South Central lost the highest shares of college graduates

6 Literature Review Florida (2002) – Key role of diversity Diversity attracts better than climate, recreational, and cultural amenities – Talent and high tech industries lead to higher regional incomes

7 Literature Review Glaeser (2005) – Measure the effects of higher education on growth rates – An area with twice as many colleges in 1940 faced 4% faster growth rate after 1970 – Positive effect on wages for high and low skilled workers

8 Data – By State Dependent Variables: – Net Migration Bachelor’s – Net Migration Master’s – Net Migration Doctorate U.S. Census Bureau – Number of Patents U.S. Patent and Trademark Office 2005 – Economic Growth Bureau of Economic Analysis Independent Variables: – Per Capita Income Bureau of Economic Analysis 2000 – Violent Crime Rate Bureau of Justice Statistics 2000 – Climate U.S. Dept. of Agriculture – Number of Libraries Per Capita National Center for Education Statistics 2000 – Unemployment Rate Bureau of Labor Statistics 2000 – Restaurants National Restaurant Association 2000 – Percent Foreign Speaking U.S. Census 2000 – Park Visitors/Acreage U.S. Census 1997

9 Methodology Multiple Linear Regressions: – Dependent variable = net migration of bachelor’s degrees, master’s degrees, and doctorate degrees

10 Methodology Simple Linear Regressions: – Run regression with net migration by master and doctorate degrees

11 Overview Location choice of talent can positively impact a state Understanding which factors draw in talent can help states develop positive economic policies Regression results will indicate which factors are significant, and if talent has a positive impact on state economies

12 Descriptive Statistics VariablesNminmaxmeanstd Libraries Economic Growth Patents % Foreign Speaking Per Capita Income Unemployment Rate Violent Crime Rate January Sun January Temperature July RH July Temperature Park Acreage Net Migration Bachelors and Above Net Migration Bachelors Net Migration Masters Net Migration Doctorate/Professional Bachelors & Above/Population E Bachelors/Population Masters/Population Doctorates/Population E

13 Tests of Multicollinearity and Heteroskedasticity For all four regressions of net migration, variance inflation factor < 10, so multicollinearity is not an issue Heteroskedasticity Tests: – Cannot reject null – No presence of heteroskedasticity ModelChi-SquareP Value Bachelors & Above Bachelors Masters Doctorate

14 ANOVA and Adjusted R-Squared Results ANOVA results: – Overall, each model is significant Adjusted R 2 : – Each model explains about 58% of the variation in net migration Model F ValueP Value Bachelors & Above6.89<.0001 Bachelors6.25<.0001 Masters6.93<.0001 Doctorate7.95<.0001 Model Adj. R 2 Bachelors & Above Bachelors Masters Doctorate0.5864

15 Results from Bachelors and Above Regression ParameterStandard VariableLabelEstimateErrort ValueP Value Intercept JanSunJanuary Sun-3.8E E JanTempJanuary Temperature1.88E E JulyRHJuly Relative Humidity-5.9E E JulyTempJuly Temperature-1.61E E vcrViolent Crime Rate4.97E E flPercent Speaking Foreign Language4.41E E incPer Capita Income E-73.76E libLibraries per Capita E perparkPark Visitors/Acreage-1.3E E URUnemployment Rate

Interpretation of Results: If the violent crime rate increased by 1 (per 100,000) net migration would increase by.497 (per 100,000) If per capita libraries increase by 1, net migration would decrease by 22 people (per 100,000) A $1000 increase in income increases net migration by 40 people (per 100,000)

17 Results from Bachelors Regression VariableLabelParameterStandardt ValueP Value EstimateError Intercept JanSunJanuary Sun E JanTempJanuary Temperature JulyRHJuly Relative Humidity-6.03E JulyTempJuly Temperature vcrViolent Crime Rate4.32E flPercent Speaking Foreign Language incPer Capita Income3.02E E libLibraries per Capita perparkPark Visitors/Acreage E URUnemployment Rate

Interpretation of Results: If violent crime rate increases by 1 (per 100,000), net migration will increase by.432 people (per 100,000) If per capita libraries increase by 1, net migration decreases by people (per 100,000) A $1000 increase in income increases net migration by 30.2 people (per 100,000)

19 Results from Masters Regression VariableLabelParameterStandardt ValueP Value EstimateError Intercept JanSunJanuary Sun JanTempJanuary Temperature E JulyRHJuly Relative Humidity1.30E JulyTempJuly Temperature vcrViolent Crime Rate4.14E E flPercent Speaking Foreign Language incPer Capita Income7.61E E libLibraries per Capita perparkPark Visitors/Acreage E E URUnemployment Rate

Interpretation of Results: Only per capita income is significant: – A $1000 increase in income increases net migration of those with a master’s by 7.61 people (per 100,000)

21 Results from Doctorate Regression VariableLabelParameterStandardt ValueP Value EstimateError Intercept JanSunJanuary Sun E E JanTempJanuary Temperature JulyRHJuly Relative Humidity-3.45E JulyTempJuly Temperature vcrViolent Crime Rate2.41E E flPercent Speaking Foreign Language incPer Capita Income2.08E E libLibraries per Capita perparkPark Visitors/Acreage E E URUnemployment Rate

Interpretation of Results: 10 degree increase in January temperature increases doctorate migration by 2.18 (per 100,000) Increase of 1 in per capita libraries decreases doctorate migration by.903 (per 100,000) $1000 increase in income increases migration of doctorate holders by 2.08 (per 100,000)

23 Positive Effects of Migration on a State Tests of Heteroskedasticity - Results of chi-square tests show no presence of heteroskedasticity PatentsChi- Square P Value Bachelors & above Bachelors Masters Doctorate Economic GrowthChi- Square P Value Bachelors & above Bachelors Masters Doctorate

24 Regression Results - Patents ModelIntercept α R2R2 Bachelors and Above (<.0001) (.1407).0253 Bachelors (<.0001) (.2095).0127 Masters (<.0001) (.0130).1057 Doctorate (<.0001) (.2320).0096

Interpretation of Results: Only master’s degree holders have a significant effect on patents Increase of 10 master’s degree holders in 2000 increases patents in 2005 by % of the variation in patents issued is explained by net migration of master’s degree holders

26 Regression Results – Economic Growth ModelIntercept λ R2R2 Bachelors and Above (<.0001) (.0903).0390 Bachelors (<.0001) (.1047).0342 Masters (<.0001) (.136).0258 Doctorate (<.0001) (.026).0810

Interpretation of Results: Increase of 1 with bachelor’s degree and higher increases growth by.129% Increase of 1 with bachelor’s degree increases growth by.151% Master’s degree holders – no significant impact Increase of 1 with a doctorate increases growth by 2.79%

Conclusion Per capita income is positive and relevant in the attraction of talent at all education levels Violent crime rate – positive effect on bachelor’s degree holders – Metropolitan areas Negative effect of per capita libraries on migration of bachelor’s and doctorate holders – Educational resources not a strong priority (sample only includes ages 22-29)

Implications Preferences do vary based on education level Positive effects of net migration exist and are significant Policy Initiatives: – Restructure tax codes – Attract businesses to increase salary – Emphasize metropolitan areas – To attract doctorate holders, promote climate

30 Bibliography Florida, Richard. “The Economic Geography of Talent.” Annals of the Association of American Geographers, 92(4), p ; (2002). Glaeser, Edward. “Smart Growth: Education, Skilled Workers, and the Growth of Cold-Weather Cities.” Harvard University, April Gee, Wilson. “The ‘Drag’ of Talent out of the South.” Social Forces, Vol. 15, No. 3, p ; (1937). Harden, Brian. “Brain-Gain Cities Attract Educated Youth.” The Washington Post, Kodrzycki, Yolanda. “Migration of Recent College Graduates: Evidence from the National Longitudinal Survey of Youth.” New England Economic Review; (2001). Schwartz, Aba. “Migration, Age, and Education.” The Journal of Political Economy, Vol. 84, Issue 4, Part 1, p ; (1976)