No 'Brain Drain' for California, Report Finds

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California tops the nation in its ability to retain its highly skilled workers, according to research by the nonprofit think tank The Milken Institute. Texas leads in retention of its native citizens, though California placed second in that regard.

Authors I-Ling Shen, Perry Wong and Ross DeVol combed through census data for 2000 to 2009, looking at the migration patterns of those ages 25 to 64. They defined a highly skilled worker as those with a bachelor's degree or higher. They were looking at the idea of "brain drain" - that California's prestigious universities train highly skilled workers, only to lose them to other states. They concluded that's not the case.

This San Francisco Business Times article focuses on the point taken from the report that more than half of California's engineers and computer and information scientists are foreign born. While 32.5 percent of all skilled workers were foreign born, the percentage jumped to 55.9 for engineers and 54.9 for computer and information scientists. It quotes William Ibbs, an engineering professor at the University of California-Berkeley, saying:

It might say something about California's priorities students prefer to study law and business rather than engineering, because there's more money in those fields.

Among the report's findings:

• No. 1 Texas lost 31 percent of its skilled natives to other states; California ranked second, with 35 percent of native-born skilled workers moving elsewhere. Meanwhile, nearly half of all skilled Americans did not live in their birth state.
• California had the least out-migration, with a "skill outflow" averaging 2.2 percent, a full percentage point below the national rate.
• Outflow for foreign-born skilled residents from California was the lowest in the nation. The report found them as unlikely to leave the state as native Californians, but once they decided to leave, most likely they would move back to their home country.
• Texas was the most likely new home for skilled Californians (12 percent). That percentage jumped to 16, though, for out-migrants with STEM degrees (science, technology, engineering or mathematics). Other top destinations: Washington, Arizona, New York and Oregon, while Colorado and Massachusetts ranked higher for those with STEM degrees.
• Despite its retention rate, California had less success in attracting talent from other states, possibly due to slow employment growth during those years in the high-tech industry, the report says. However, inflows from abroad more than made up the difference.

The report found that in 2009, high tech accounted for 9.3 percent of the state's employment - 1.3 million jobs - and accounted for 16 percent of the state's wages. However, as other tech centers have developed throughout the country, California's share of national high-tech employment has decreased. There are simply more opportunities out there - and not just in the United States. Entrepreneur/scholar Vivek Wadhwa, among the leading proponents of policy to retain highly educated workers, maintains that foreign-born entrepreneurs established 52 percent of Silicon Valley companies and created millions of jobs. The Milken report concludes that with the opportunities available around the world, California cannot continue to rely on a steady supply of foreign-born talent:

... the idea that high-skilled workers are leaving en masse is generally fiction. But this shouldn't give the state license to sit back and relax, especially when competition for talent is increasingly fierce.

It also raises concern about the budget woes affecting the state's universities:

An economic turnaround will eventually recover lost jobs, but it is harder to recover a generation of lost human capital.