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Monday, January 17, 2011

Oversold on higher education


I was listening to Steve Wark in the Morning...this morning, and Mr. Wark's guest (UNLV employee and secretary of AFSCME Local 44) argued that we need to invest more in higher education to create a better educated workforce so the state can attract better, high paying jobs. This is an argument we've heard before and it is wrong.

I looked up the top public and private universities as ranked by U.S. News and World Report and compared the states with top universities with their own net migration rates between 2000-2008 (net migration is the combination of people moving in and out of a state).

The median net migration rate for a state with a top 100 university was -5,700 while the median net migration rate for a state outside the top 100 was 15,000 between 2000 and 2008.  The combined net migration for the Ivy League states was -2.5 million over that same period. If the states with the elite Ivy League universities are bleeding residents is there really any hope for Nevada?

Nevada, with its best university considered Tier 3, saw a net migration of 378,000 - larger than the combined net migration of all 32 states (and DC) with a top 100 university.

Finally, I conducted a quick regression analysis by assigning a score of 1 for states with a top university and 0 for a state without a top 100 university and compared this with the states net migration rate. I found the relationship to be extremely weak, likely to occur at random but also negative. Basically, having a top university had no impact on net migrations over this period. In other words, people weren't moving to states because of their university system.

If you were wondering why net migration matters, it is simple: people vote with their feet. Americans are moving to where the jobs are or where they believe they can have a better life. It will be interesting to see the net migration data for 2009 and 2010 (Nevada has lost a lot of people over these last two years) but I doubt the overall results much will change.


Just to be sure, I also double checked the Top 100 universities against unemployment rates for 2009 (available on the Bureau of Labor Statistics website - 2010 data will be available March 2011). States with a top 100 university averaged an unemployment rate of 8.5 percent while the states without a top 100 university averaged 7.3 percent. A regression analysis shows that this relationship was statistically significant but still weak (only explaining about 7 percent of the variance). In other words, there is a small correlation between having a high ranked university and a higher unemployment rate.

The fact is this, investing more in higher education does NOT guarantee that Nevada will attract better jobs. It doesn't even guarantee that we will graduate better educated adults...especially since Nevada's university system already ranks 15th best in funding per-pupil.

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