LOS ANGELES — Though the headwinds facing the California economy are real, new research from the Milken Institute shows that the state's attractiveness to those who power the leading edge of its economy remains remarkably intact.
According to the report, "What Brain Drain? California Among the Best in U.S. at Retaining Skilled Workers," the idea that high-skilled workers are leaving in droves is not true. The study examined data for skilled workers across the country, defining them as holders of at least a bachelor's degree, and between the ages of 25 and 64.
"Because the major disadvantage of out-migration for any state is the loss of skilled young workers, we were pleased to see that the numbers tell a story quite different from what people seem to believe about the flow of labor and California," said Ross DeVol, the Institute's chief research officer. The report's findings will be discussed at the Milken Institute State of the State Conference on Thursday in Los Angeles.
After examining labor flows to and from all fifty states, "What Brain Drain?" found that — contrary to some popular misperceptions — in the last decade California has the least annual "skill out-migration" relative to the total of skilled residents.
Other findings include:
- California is a close second among states in its retention of its own high-skilled natives. Over the past decade, about 65 percent of skilled California natives were living and working in the state, far above the national average of about 50 percent. Only Texas scored higher, with nearly 70 percent of its skilled natives living in the state.
- In the decade 2000-2009, California's "skill outflow" — basically, the number of skilled workers leaving the state — averaged 2.2 percent a year, a percentage point less than the national rate.
- The Golden State continues to be a powerful magnet for skilled immigrants from around the world. Once foreign-born skilled workers come to California, they tend to stay; the outflow rate for this group was the lowest in the nation.
- Of those who did leave the state in 2009, 12 percent went to Texas, the biggest single destination for skilled Californians. Overall, however, California had a lower skill outflow rate than Texas.
- Today, California's ability to attract skilled workers from other states is less than in the past, in part due to job losses in the high-tech sector. But the state's continuing ability to attract skilled workers from abroad more than makes up for the gap.
"Most important in California's case, the concentration of young innovators with advanced skills has been key to the success of Silicon Valley and other innovation clusters," said I-Ling Shen, a senior research analyst at the Milken Institute. "These clusters collectively act as an economic engine that breeds other industries providing professional, financial and personal services."
The report's policy recommendations conclude that although California has managed to keep skilled individuals within its borders, it can't rest on its laurels. California's overall unemployment rate is the second highest in the nation, and its high tech sector alone shed more than 75,000 jobs from 2008 to 2009. The state's ability to retain high skilled workers is a bright spot. But its heavy reliance on foreign-born skilled workers may backfire if these immigrants respond to new opportunities in their native countries.
"Policy efforts will be needed if the state intends to maintain its competitiveness and its leadership position" noted DeVol. "Nurturing the tech industry, maintaining the state's education system, and further developing a home-grown talent pool will be increasingly important in the years to come."
"What Brain Drain? California Among the Best in U.S. at Retaining Skilled Workers" is available at www.milkeninstitute.org.