Who is leaving the state? Where are they going?
After a decade of solid employment growth, the Wisconsin economy has been languishing lately, with several factors contributing to this malaise. First, the state’s industrial policy has focused almost exclusively on attracting and maintaining manufacturing jobs through tax breaks and direct subsidies. While manufacturing jobs typically pay above-average wages, the manufacturing sector of the economy is notoriously cyclical, and its overall share in the Wisconsin (and U.S.) economy has continued to shrink. Because of our heavy reliance on manufacturing, Wisconsin’s unemployment rate recently rose above the national unemployment rate for the first time in over a decade, chiefly due to layoffs in the manufacturing sector during the recent economic downturn.
Secondly, at the same time that the manufacturing sector has shrunk, state income growth has slowed. Our non-manufacturing employment growth has been concentrated in lower-paying industries, rather than the higher-paying jobs we would have hoped for. According to the Bureau of Economic Analysis, Wisconsin’s annual per-capita income is roughly $28,000 — $4,000 (i.e. 12.5%) below Minnesota and Illinois.
One explanation for this pattern may be the “brain drain”: that a large number of highly skilled Wisconsin natives are leaving the state to pursue careers elsewhere in the country. Such an exodus would imply that, although our state educational institutions are succeeding in creating an educated workforce, some (perhaps policy) barriers must exist, that deter modern, high-tech companies from coming to Wisconsin to take advantage of those skills, education, and training.
The purpose of this research report is to explore the state’s so-called “brain drain,” and to determine exactly who is leaving, where they are going, and what factors might be influencing their departure. To that end, we gathered data on the 1980 and 1990 graduating classes of the University of Wisconsin Oshkosh (UWO), conducting an in-depth survey of a substantial fraction of the two cohorts. Our intention is to go beyond anecdotal analysis, to quantify the extent of any brain drain among UWO college graduates, as well as to identify any significant differences between those alumni who remain in the state and those who left Wisconsin behind.
The state spends a large amount of money on the University of Wisconsin system, currently more than $1 billion per annum. With such a large expenditure, the state would presumably like some kind of a return on its investment, and the exodus of talented college graduates reduces its return as well as the popular support for a quality university system.
We cannot declare precisely what is causing the brain drain in Wisconsin. A realistic explanation, we feel, is that the state’s moribund industrial policy, its reputation as a high-tax state, its slow growth in personal income, and the departure of its talented workers are all interconnected. By examining the factors connected with the brain drain, we hope to be able to shed some light on some of the other factors of the Wisconsin economy as well.