Educate, Graduate, Leave: New Study Quantifies $96 Billion "Brain Drain" Impact on Iowa Economy

By Herald Staff

A comprehensive research report from the Common Sense Institute (CSI) Iowa indicates that the state has forfeited an estimated $96 billion in cumulative earnings due to the out-migration of public university graduates over the last two decades. The study, titled "Educate. Graduate. Leave.," suggests that the persistent departure of degree holders from Iowa’s three Board of Regents institutions has significantly altered the state's economic trajectory.

The researchers analyzed retention data from 2001 to 2021 for the University of Northern Iowa (UNI), Iowa State University, and the University of Iowa. The findings reveal a consistent "talent leakage," with only about half of all graduates remaining in the state ten years after graduation, despite in-state students comprising roughly 75% of the total enrollment across the three schools.

Regional Retention Trends

The data highlights varying retention levels across the universities. The University of Northern Iowa, located in the nearby Cedar Valley, maintains the highest post-graduation retention rates among the three schools. However, the report notes that even UNI performs below expectations relative to its high percentage of in-state students.

The University of Iowa was identified as having the lowest ten-year retention rate at 37.7%. Overall, researchers found that if retention had remained proportional to the number of Iowa-resident students enrolled during the study period, the state’s 2025 GDP would be approximately $7 billion larger.

Fiscal and Economic Projections

The economic modeling used in the study details the long-term impact on Iowa’s tax base and labor market:

• Lost Revenue: The report estimates that Iowa would collect an additional $766 million in annual state and local tax revenue if the 68,000 graduates who left during the study period had stayed.
• Per-Graduate Impact: Researchers project that a single college-educated Iowan who leaves the state post-graduation represents a loss of $4.5 million in total gross earnings over their working life.
• Recent Trends: While retention rates showed some improvement between 2010 and 2012, the study concludes that losses have worsened again in recent years, driven by weaker retention in the most recent graduating cohorts.

Researcher Recommendations

To address the findings, the Common Sense Institute suggests that state policy focus on the "return on investment" of taxpayer dollars used to fund higher education. The researchers recommend a closer alignment between university degree programs and the specific labor demands of Iowa industries to create more direct pathways to in-state employment.

The report also identifies a need for policymakers to address the competitive gap between Iowa and neighboring Midwestern states to retain the "home-grown" talent that currently fuels the workforces of regional hubs like Chicago and Minneapolis.

The full report, including data breakdowns for each university and detailed economic forecasts through 2060, is available on the Common Sense Institute Iowa website. Residents and local stakeholders are encouraged to examine the data and the methodology to better understand the challenges facing Iowa’s future workforce and economic competitiveness.