USING HUMAN CAPITAL THEORY TO DEVELOP A POLICY APPROACH TOWARDS COLLEGE STUDENT MIGRATION IN ILLINOIS Ryan Lee Smith, Ph.D. College of Education University of Illinois at Urbana-Champaign, 2006 Dr. Kern Alexander, Adviser The purpose of this study was to use human capital theory to develop a policy approach towards college student migration in Illinois. A rate of return analysis revealed the social rate of return for college student migrants who return to Illinois and the private rate of return was 15.95%. It was estimated that due to college student migration in Fall 2000, Illinois lost 4,781 college graduate residents. The economic impact of this in terms of lost lifetime tax dollars to the State of Illinois from college student migration was estimated to be $776,400,930. Policy recommendations included mission differentiation, incentives for residents and non-residents to enroll at Illinois institutions, and encouraging college graduate residence in Illinois. © 2006 by Ryan Lee Smith. All rights reserved. USING HUMAN CAPITAL THEORY TO DEVELOP A POLICY APPROACH TOWARDS COLLEGE STUDENT MIGRATION IN ILLINOIS BY RYAN LEE SMITH A.B., University of Missouri Columbia, 1994 M.S., Drake University, 1998 DISSERTATION Submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Education in the Graduate College of the University of Illinois at Urbana-Champaign, 2006 Urbana, Illinois iii ABSTRACT The purpose of this study was to use human capital theory to develop a policy approach towards college student migration in Illinois. A rate of return analysis revealed the social rate of return for college student migrants who return to Illinois and the private rate of return was 15.95%. It was estimated that due to college student migration in Fall 2000, Illinois lost 4,781 college graduate residents. The economic impact of this in terms of lost lifetime tax dollars to the State of Illinois from college student migration was estimated to be $776,400,930. Policy recommendations included mission differentiation, incentives for residents and non-residents to enroll at Illinois institutions, and encouraging college graduate residence in Illinois. iv This dissertation is dedicated to my wife, Angela, my parents, and my daughter, Jenna. Throughout the years of our marriage, my wife's support of my goals has been unwavering. Without her support, patience, and encouragement, this dissertation's contribution to the field of education research would not had been possible. Reflecting on my educational career, I am appreciative of my parents wisdom, support, and encouragement. My daughter is my inspiration. She motivates me to work hard in ensuring that children receive a quality education, making the world a better place for all of them. v ACKNOWLEDGMENTS My thanks and appreciation to Dr. Kern Alexander and Dr. King Alexander, my two program advisers. Their support, advice, and contribution to my education will extend well beyond my graduate school years. I would also like to acknowledge Dr. Randy Kangas, who served on the committee, provided advice and direction for my dissertation research, provided me with the opportunity to gain valuable experience as a graduate assistant in the University of Illinois Office for Planning and Budgeting, and continues to provide valuable career advice. Dr. Richard Hunter and Dr. Stan Ikenberry, the other two members of my committee, provided thought-provoking insight and clarity to my dissertation. I would also like to acknowledge Dr. M. Christopher Brown, who always encouraged and challenged me. Dr. Brown provided support for several professional development opportunities and mentored me throughout my experience in the program. I have been fortunate to have several excellent instructors and professional staff who stood out while enrolled at the University of Illinois. Dr. Orlo Austin gave me the opportunity to work as a graduate assistant in the Office of Student Financial Aid. Dr. Jim Ward provided direction while I was formulating research questions and methods. I was awarded the Dr. Richard and Dr. Patricia Justice Fellowship while enrolled at the University of Illinois. I am grateful to the Justice family for not only the fellowship, but also for their support of the Higher Education program. The Education Organization and Leadership support staff, including Becky Grady, Tracee Palmer, and Cynthia Reiter, assisted greatly in the completion of my program. Selena Douglass completed the final edit for this dissertation and provided indispensable assistance in its completion. vi TABLE OF CONTENTS LIST OF TABLES..........................................................................................................viii LIST OF FIGURES ........................................................................................................... x CHAPTER I INTRODUCTION........................................................................................ 1 Statement of Problem............................................................................................. 2 Background............................................................................................................ 3 Statement of Purpose ........................................................................................... 10 Research Orientation............................................................................................ 11 Research Questions.............................................................................................. 12 Definition of Terms.............................................................................................. 12 Limitations ........................................................................................................... 14 Assumptions......................................................................................................... 15 Review of Literature ............................................................................................ 16 Methodology........................................................................................................ 17 Organization of the Dissertation .......................................................................... 18 CHAPTER II REVIEW OF LITERATURE ................................................................... 19 Human Capital and Migration Theory................................................................. 19 College Student Migration................................................................................... 21 Social Rate of Return........................................................................................... 26 Conceptual Framework........................................................................................ 28 CHAPTER III METHODOLOGY .................................................................................. 30 Population ............................................................................................................ 31 Data Collection.................................................................................................... 32 Data Analysis....................................................................................................... 35 Significance of the Study..................................................................................... 36 CHAPTER IV RESULTS................................................................................................ 39 College Student Migration................................................................................... 39 Social Rate of Return........................................................................................... 49 Estimated Impact of College Student Migration on the Stock of College Graduates................................................................................................ 56 Estimated Economic Impact ................................................................................ 58 CHAPTER V DISCUSSION........................................................................................... 61 Summary of Findings........................................................................................... 61 Human Capital Development and College Student Migration ............................ 63 Policy Recommendations.....................................................................................65 Recommendations for Further Research.............................................................. 93 vii REFERENCES ................................................................................................................ 96 APPENDIX A COLLEGE STUDENT MIGRATION FROM ILLINOIS BY STATE AND SECTOR........................................................................................... 119 APPENDIX B COLLEGE STUDENT MIGRATION FROM ILLINOIS TO FOUR-YEAR PUBLIC INSTITUTIONS ..................................................................... 123 APPENDIX C COLLEGE STUDENT MIGRATION FROM ILLINOIS TO FOUR-YEAR PRIVATE INSTITUTIONS .................................................................. 145 APPENDIX D COLLEGE STUDENT MIGRATION FROM ILLINOIS TO TWO-YEAR PUBLIC INSTITUTIONS....................................................................... 182 APPENDIX E COLLEGE STUDENT MIGRATION FROM ILLINOIS TO TWO-YEAR PRIVATE INSTITUTIONS.................................................................... 195 APPENDIX F COLLEGE STUDENT MIGRATION FROM ILLINOIS TO FOR-PROFIT INSTITUTIONS ...................................................................................