UT-THEC Study: Those Educated in Tennessee Stay, Earn More

KNOXVILLE — People who go to college in Tennessee tend to stay in the state to work. These educated workers earn more than other Tennessee workers, and their salaries escalate with their education levels.

Those are among the findings of “School-to-Work: Do Tennessee’s Higher Education Graduates Work in Tennessee?” This report was prepared by the Center for Business and Economic Research (CBER) under an agreement with the Tennessee Higher Education Commission (THEC) and with the cooperation of the Tennessee Department of Labor and Workforce Development.

This report is the first installment of a multipart project.

“This is the inaugural effort in what we hope will be an ongoing partnership with (UT economics professor and CBER director) Bill Fox and CBER to better inform the public about college and university graduates’ contributions to the state’s workforce,” said Richard Rhoda, THEC executive.

Future reports will address trends and earnings based on the higher education system and institution, key majors, students’ race and sex and lottery scholarship status.

Fox said these studies will help officials understand how the state’s higher-ed system stems the state’s “brain-drain.”

“While we do not have data on the ability of other states to retain their graduates as workers, this project provides key information that helps our understanding of the returns to Tennessee from investments in higher education, by examining the propensity of people who attend Tennessee public institutions of higher education to work in Tennessee after graduation,” the report states.

For the study, researchers looked at 207,600 people who received degrees from colleges and universities in Tennessee between 1997 and 2005. Of those degrees awarded, 88 percent went to in-state students and 12 percent went to out-of-state students.

Of the students studied, a little more than half earned bachelor’s degrees. Another 22 percent earned master’s degrees, doctorates or professional or educational specialist degrees. The remainder earned associate’s degrees or certificates.

Working in Tennessee

In their first quarter out of school, 67.2 percent of the graduates were working for Tennessee employers who were part of the state’s unemployment system. An additional 6.2 percent were continuing their education.

In-state students are more likely than out-of-state students to remain in Tennessee after finishing their education. One year after graduation, 69.7 percent of in-state students were working in Tennessee compared to only 25.6 percent of out-of-state students.

Those earning associate’s degrees were the most likely to work in Tennessee following graduation. One year after graduation, about 73.3 percent were working in Tennessee.

Education pays

Graduates of Tennessee colleges and universities who remained in state to work earned an average salary of $38,927 per year in 2005 — 16.3 percent more than the average $32,565 per year earned by everyone else working in the state.

“As expected, the higher the degree earned, the higher the average wages,” the report says.

One year after graduation, those who earned doctorates were earning an average of $57,097 per year. After four years, they earned $65,361, and by seven years, they were earning $68,760. Meanwhile, those with associate’s degrees were earning $33,326 annually a year after graduation, $38,952 four years later and $42,921 after seven years. While those with associate’s degrees and bachelor’s degrees started out earning about the same amount, bachelor’s degree holders earn more over time. Seven years after graduation, those with bachelor’s degrees were earning about $7,000 more than those with associate’s degrees.

“This study confirms a very fundamental message, but one that every Tennessean needs to understand. The message is that education pays,” Rhoda said.

To read the report and learn more about CBER, see http://cber.bus.utk.edu/.


Contacts:
Bill Fox, (865) 974-6112, billfox@utk.edu

David Wright, THEC, (615) 532-3862, david.l.wright@state.tn.us

Amy Blakely, (865) 974-5034, amy.blakely@tennessee.edu