ANALYZING RURAL REGION BRAIN DRAIN IN THE U.S.

• Sponsoring Institution: National Institute of Food and Agriculture
• Project Status: COMPLETE
• Funding Source: HATCH
• Reporting Frequency: Annual
• Accession No.: 0208244
• Project Start Date: Sep 1, 2006
• Project End Date: Aug 31, 2011
• Program Code: [(N/A)]- (N/A)

Recipient Organization
UNIVERSITY OF MISSOURI
(N/A)
COLUMBIA,MO 65211

Performing Department
SOCIAL SCIENCES

Non Technical Summary
Out-migration of college-educated workers from rural areas poses significant threats to the social and economic vitality of rural America. The goal of this research is to provide empirical analysis of the location choices of individuals through mid-life, with particular focus on college-educated labor and rural/urban distinctions. It will also provide some analysis of place-related factors that may influence workers' migration and location decisions. Specific research questions to be addressed are 1) Are rural youth more likely to choose rural places? and 2) Why are some rural counties gaining college graduates relative to the U.S. as a whole while other rural counties are falling behind?

Animal Health Component

75%

Research Effort Categories

Basic

25%

Applied

75%

Developmental

(N/A)

Classification

Knowledge Area (KA)	Subject of Investigation (SOI)	Field of Science (FOS)	Percent
608	6099	3010	100%

Knowledge Area
608 - Community Resource Planning and Development;

Subject Of Investigation
6099 - People and communities, general/other;

Field Of Science
3010 - Economics;

Keywords

outmigration

rural development

brain drain

Goals / Objectives
Objective 1. To analyze the effect of location-specific human capital on migration choice. Some rural counties are gaining college-educated labor, but there is a lack of understanding about the types of people who are moving to rural places. A common perception is that people are more likely to move back to places where they have lived previously because they have location-specific capital associated with those places. Policy makers tend to focus efforts on recruiting former residents back to their states rather than trying to attract new in-migrants. However, recent research rejects the idea that place-specific ties are especially important (Von Reichert, 2002; Mills and Hazarika, 2001). Preliminary research shows that proximity to home county is an important factor in individual location choices but preferences from rural locations vary significantly in the population and this variance is not fully explained by observed characteristics such as age, marital status and number of young children. Objective 2 To assess the importance of county level social and economic characteristics on brain drain. For a previous paper, (Artz, 2003) I developed a county-level measure of brain drain/gain for U.S. counties. This analysis of the relative change in the share of college-educated population by county over 1970-2000 reveals that absent regional effects, metropolitan areas have gained college-educated workers at a faster rate than non-metropolitan and rural areas. However, there is variation among rural and non-metropolitan counties. Factors important for explaining this variation will be assessed.Objective 3 To assess the importance of access to physical capital, such as high-speed Internet service, and location specific human capital for rural earnings growth. The capital-skill complementarity (CSC) hypothesis posits that skilled labor or schooling is more complementary with capital than is unskilled labor. As a result, increases in capital stock lead to an increased demand for skilled labor and consequently an increase in the wage for skilled labor relative to the wage for unskilled labor (Griliches, 1969). If capital and skilled labor are complements in production, increases in the capital stock should result in faster wage growth for skilled workers. This hypothesis will be investigated using an earnings function including measures of physical capital stock and location-specific capital. Accumulation of location-specific capital is hypothesized to contribute positively to earnings growth. Objective 4. Using findings from objectives 1 through 3, evaluate proposed policy options for stemming out-migration and encouraging in-migration to rural areas of Missouri and other states. Many policy options for stemming the tide of out-migration have been proposed. For example, recent research suggests aggressive state-sponsored college scholarship initiatives for resident students might be effective (Tornatzky, Gray, Tarant and Zimmer, 2001). The Curators Scholar Award in Missouri is one such program. The question is, would the students receiving these awards have attended college in state in spite of the scholarship?

Project Methods
This research will use data from the Panel Study of Income Dynamics (PSID). The PSID is a longitudinal dataset collected by the Institute for Social Research at the University of Michigan. This data set includes a sample of households selected in 1968 and re-interviewed every year up to 1996; subsequent to this date, households are interviewed biannually. The most recent available data is from 2001. New individuals are added when they join a participating household; and households are added when individuals split off from a participating household as long as they can be followed and re-interviewed. By the end of the 2003 data collection, the PSID will contain information about more than 65,000 individuals spanning up to 36 years of their lives. The focus of the study is the dynamic aspects of economic, demographic and social behavior of individuals. As such, the PSID contains individual characteristics and migration information suitable to this type of analysis. Panel data allow for the construction of migration and life event histories and provide significantly greater detail about individual characteristics over long periods of time. In order identify rural and urban location choices, confidential identifiers indicating county of residence and zip code of residence have been requested. This will allow for the matching of individuals in the PSID data to other secondary data on characteristics of the origin region. It will also give flexibility in defining the home region and classifying the locations as rural or urban. The PSID data will be supplemented with data from secondary sources such as the U.S. Census, the Bureau of Economic Analysis and the Economic Research Service. Appropriate econometric models will be specified and used to analyze the research questions outlined above. For objective one, models of location choice and migration will be used, including a hazard rate or duration model of migration and a mixed logit specification of location choice. For objective two, regression analysis will be applied to determine which factors are important for explaining brain drain at the county level. For objective three, an earnings function approach will be employed. Findings from objective 1 through 3 will inform analysis of proposed policy options for stemming out-migration and encouraging in-migration to rural areas.

Progress 09/01/06 to 08/31/11

Outputs
OUTPUTS: This research uses data from over 5400 Iowa State University alumni spanning 24 years to compare the characteristics of graduates who chose rural residence locations with those who chose to reside in an urban area. There are a few strong predictors of which graduates choose to live in rural counties. The most likely rural alumni are rural born with degrees from the College of Agriculture. One note of caution here is that this finding may be unique to Land Grant Universities which attract a large number of rural-born students into their agricultural programs. Rural alumni place greater emphasis on non-pecuniary career goals than their urban counterparts. Another interesting implication of these data is that older alumni are somewhat more likely to live in rural counties, but not necessarily in the county in which they were raised. At the same time, interest in rural life appears to be increasing, at least conditional on the farm economy. These data also show a large income gap between rural and urban alumni, which widens with experience and advanced degrees. Notably, the gap is fairly small for the most recent cohort of graduates and for fields in which rural labor demand is stronger, agriculture and human sciences. A second paper investigates entrepreneurship of migrants and their location choice in attempt to draw connections between migration and economic development, especially the role of business formation in rural development. We examine the influence of individuals' migration, human capital, social capital and family background on rural entrepreneurship. We find that social capital and social networks established in one's home region are a strong factor in location choice of entrepreneurs. Entrepreneurs from rural origins tend to start their businesses in rural areas in general and half of entrepreneurs migrate back to their home region to take local comparative advantages. Rural entrepreneurs are also more likely to obtain financial support from family members, friends and local banks to start a business than are their urban counterparts. More generally, we find rural residents are more likely to start a business than urban residents. One plausible explanation for this finding is a lack of job opportunities in more remote rural areas. Presentation: Yu, L. and G. Artz. "Migration and Rural Entrepreneurship." Presented at the American Agricultural Economics Association annual meetings, Milwaukee, WI, July 26-28, 2009. PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: Nothing significant to report during this reporting period. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
This research has resulted in a change in knowledge. The findings of this research represent new information about the characteristics and motivations of college - educated individuals who choose to locate in rural regions of the U.S.

Publications

• No publications reported this period

Progress 01/01/09 to 12/31/09

Outputs
OUTPUTS: This research uses data from over 5400 Iowa State University alumni spanning 24 years to compare the characteristics of graduates who chose rural residence locations with those who chose to reside in an urban area. There are a few strong predictors of which graduates choose to live in rural counties. The most likely rural alumni are rural born with degrees from the College of Agriculture. One note of caution here is that this finding may be unique to Land Grant Universities which attract a large number of rural-born students into their agricultural programs. Rural alumni place greater emphasis on non-pecuniary career goals than their urban counterparts. Another interesting implication of these data is that older alumni are somewhat more likely to live in rural counties, but not necessarily in the county in which they were raised. At the same time, interest in rural life appears to be increasing, at least conditional on the farm economy. These data also show a large income gap between rural and urban alumni, which widens with experience and advanced degrees. Notably, the gap is fairly small for the most recent cohort of graduates and for fields in which rural labor demand is stronger, agriculture and human sciences. A second paper investigates entrepreneurship of migrants and their location choice in attempt to draw connections between migration and economic development, especially the role of business formation in rural development. We examine the influence of individuals' migration, human capital, social capital and family background on rural entrepreneurship. We find that social capital and social networks established in one's home region are a strong factor in location choice of entrepreneurs. Entrepreneurs from rural origins tend to start their businesses in rural areas in general and half of entrepreneurs migrate back to their home region to take local comparative advantages. Rural entrepreneurs are also more likely to obtain financial support from family members, friends and local banks to start a business than are their urban counterparts. More generally, we find rural residents are more likely to start a business than urban residents. One plausible explanation for this finding is a lack of job opportunities in more remote rural areas. Presentation: Yu, L. and G. Artz. "Migration and Rural Entrepreneurship." Presented at the American Agricultural Economics Association annual meetings, Milwaukee, WI, July 26-28, 2009. PARTICIPANTS: Partner organizations for this project include Iowa State University. Personell include Dr. Peter Orazem, University Professor, Dr. Li Yu, postdoctoral fellow and Dr. Robert Jolly, Professor, all in the Department of Econcomics. TARGET AUDIENCES: Nothing significant to report during this reporting period. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
This research has resulted in a change in knowledge. The findings of this research represent new information about the characteristics and motivations of college - educated individuals who choose to locate in rural regions of the U.S.

Publications

• Artz, G. and L. Yu. 2010. "How ya gonna keep 'em down on the farm: Which Land Grant graduates live in rural areas" Invited paper for a special issue of Economic Development Quarterly. Currently under review.

Progress 01/01/07 to 12/31/07

Outputs
Due to personal health problems that affect my ability to work full time, my work on this project has been limited this past year. Gave an internal seminar on preliminary findings of this research, November 16, 2007.

Impacts
Analysis of data suggests that, all else equal, college educated people are as likely to choose rural locations as non-college educated. This is counter to previous research findings on this topic - more analysis is underway to help explain this finding.

Publications

• No publications reported this period