Recent college graduates leave New England at a faster rate than any region in the country, diminishing a vital resource for an economy that relies on brain power, according to a new report by the Federal Reserve Bank of Boston.
A year after graduation, the study found, only 63.6 percent of 2008 graduates of New England schools were still living in the region, with the rest leaving for better jobs, lower costs of living, or more familiar territory after years away from home. In comparison, 88 percent of college graduates in the West, about 82.7 percent in the Middle Atlantic states, and 79 percent in the South Atlantic region stayed put for at least a year.
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Massachusetts, meanwhile, ranked 38th among states in retaining recent college grads. Just over half — 52 percent — of the class of 2008 were still in Massachusetts a year after graduation, compared to a US average of 69 percent. More than 87 percent of California's class of 2008 was still in that state a year later.
New England’s “brain drain” is raising concerns for the business community, which relies of skilled, well-educated workers to drive the region’s innovation economy.
“In New England, we don’t have coal, we don’t have wonderful weather, we have smart people,” said Alicia Sasser Modestino, the report’s author and senior economist at the Boston Fed.
“That is our greatest resource, and it has been the engine of growth for decades,” she added.
For Massachusetts and New England, retaining recent college graduates is a particular challenge because of the high proportion of students who come here from other states and countries, Modestino noted. Massachusetts imports about 40 percent of students from out of state — nearly 10 times the share in California and 3 times the percentage in New York.
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Out-of-state students are more likely to return home after graduating to take advantage of deeper networks and stronger job opportunities, Modestino said. Nevertheless, she said, Massachusetts needs to do a better job to retain graduates.
Massachusetts retains only one in five recent graduates who come here from out of state, compared to one in two in California and one in three in New York. Despite perceptions, Boston’s high cost of housing isn’t driving recent graduates away. Only 2 percent of recent grads surveyed by the Fed said they left Massachusetts because of high rents. Forty percent said they left to take a job or look for work.
“It’s all about that first job,” said Modestino. “Surveys show students who step off their college campus, have an internship in the local job market, and make connections with local people will be much more likely to stay here.”
To connect students with those job-driving experiences, the Greater Boston Chamber of Commerce has created a database called Chamber Intern Connect, which lists available internships at the chamber’s more than 1,500 member businesses.
“This is a big issue for us,” said Jim Klocke, the chamber’s executive vice president. “It affects the economy, labor supply, and the future of economic growth.”
Alyssa Edes can be reached at alyssa.edes@globe.com. Follow her on Twitter @alyssaedes.