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Labor Supply and the “Brain Drain”: Signs from Census 2000

Findings

An analysis of the location and migration patterns of younger and older workers, especially those with college degrees, for the 100 most populous metropolitan areas in Census 2000 finds that:

  • The proportion of workers who are young and educated is highest in the Northeast region, followed by the Midwest, the South, and the West. This counters notions that a “brain drain” has depleted the Midwest of its younger, talented workers. The South and West regions actually have higher proportions of 25-to-34-year-old residents, but fewer of these workers hold bachelor’s degrees.
  • Young and educated workers represent a larger part of the workforce in metropolitan areas with high populations, strong arts scenes, significant international immigration, and large numbers of high-tech jobs. Whether a particular metro area has a large or small proportion of these workers depends more on the educational attainment of its 25-to-34 year olds than on the actual size of that age group.
  • Metro areas that captured the largest number of new 25-to-34- year-old residents between 1990 and 2000 are located almost exclusively in the South and West. Net migration of this age group to metro areas in the South and West was double that to metro areas in the Midwest, and four times that to metro areas in the Northeast. Growth in the size of this age cohort over the decade relates closely to job growth at the metropolitan level.
  • Compared to older workers (aged 35-to-64), young workers migrated more often to high-amenity, high-human-capital metropolitan areas during the 1990s. San Francisco, Denver, Seattle, and Atlanta ranked among the metro areas with the largest net growth in young workers relative to older workers.
  • Metropolitan areas in the Northeast have the highest proportions of workers between the ages of 55 and 64. Those nearing retirement age make up at least one in nine workers in several metro areas throughout greater New York and Pennsylvania. Older workers in these areas generally possess above-average levels of educational attainment, signaling the potential for future declines in skilled labor across the Northeast region.

Ultimately, state and local economic development policy makers should consider shifting their emphasis from increasing the quantity of certain types of workers, toward embracing human capital development as a longer-term goal. Paired with amenity strategies for younger workers and more workplace flexibility for older workers, policies to raise the stock of knowledge in a region can “split the difference” between demand-side and supply-side labor market interventions.

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