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The Origins of Talent in Rural and Urban Iowa

John Winters

A large majority of Iowa residents and talented individuals are homegrown. This is especially true among self-employed workers, non-metropolitan residents, and self-employed persons in agriculture, which highlights the importance of nurturing talent in Iowa, especially for non-metropolitan areas and the agriculture sector. Furthermore, many other states share a similar dependence on homegrown talent, and thus are wise to nurture that talent.

Human talent is critical for economic prosperity in both rural and urban areas. Formal education and entrepreneurship are widely viewed as major components of human talent, and stakeholders often advocate for policies to increase levels of education and entrepreneurship at the local, state, and national level (Acs 2006; Ma et al. 2016). Talented workers are especially geographically mobile, and the financial rewards to human talent are higher in large metropolitan areas, making them more attractive locations for potential migrants with scarce skills (Wozniak 2010; Autor 2019; Winters 2020a). Thus, non-metropolitan areas are often especially concerned about their ability to attract and retain talent. Similarly, states with high percentages of their population residing outside of large metropolitan areas worry about large numbers of more-educated residents moving to other states and from non-metropolitan to metropolitan areas within the state (brain drain).

Some brain drain is inevitable, but skilled individuals are not completely untethered. Individuals often have unique attachments to their home areas (Winters 2020b). In particular, the majority of adults in the United States live in the same state in which they were born. Similarly, human talent is disproportionately homegrown in many states; that is, the majority of talented individuals residing in a state were born in that state. This is especially true for states that may be less attractive to in-migrants—their levels of human talent are heavily dependent on the human talent that they nurture within the state.

This article uses American Community Survey (ACS) microdata obtained from IPUMS-USA (Ruggles et al. 2019) to look at the birthplaces of Iowa residents, focusing on the origins of human talent in non-metropolitan areas and metropolitan statistical areas (MSAs). I pool the 2015–2019 ACS data to increase sample size and estimation precision. Table 1 shows that 67.3% of Iowa adult residents were born in Iowa, with the percentage of adult residents born in Iowa being higher for non-MSAs (70.9%) than MSAs (62.2%). Thus, Iowa is very dependent on homegrown talent, and this is especially true of non-metropolitan areas in the state.

Table 1. Percentage of Iowa Residents Born in Iowa for Selected Groups
Iowa Residents Non-MSA Residents MSA Residents
All Adults Ages 22+67.3%70.9%62.2%
College Graduates61.3%69.0%58.1%
Self-Employed Persons73.9%80.4%64.1%
Non-Agricultural Self-Employed Persons69.9%76.4%61.6%
Agricultural Self-Employed Persons87.8%88.2%86.4%
Self-Employed College Graduates66.7%76.0%60.5%
Source: Author’s estimates from the 2015–2019 American Community Survey. All estimates are limited to ages 22 and older. College graduates are defined as persons with a bachelor’s degree or higher level of education.

Table 1 also looks at more specific groups of human talent including college graduates and self-employed persons. College graduates are especially geographically mobile, and not surprisingly, a higher percentage of college graduates in Iowa are born outside the state than among the general adult population. Still, 61.3% of college graduates in Iowa were born in the state—69.0% for non-MSAs and 58.1% for MSAs.

Self-employed persons in Iowa are disproportionately likely to be homegrown—73.9% of entrepreneurs residing in Iowa were born in the state. The corresponding rate is a whopping 80.4% in non-MSAs compared to 64.1% in MSAs. Thus, Iowa’s entrepreneurs are very disproportionately likely to be native Iowans, especially in non-metropolitan areas. Of course, many self-employed persons in Iowa are in the agriculture industry, so I next divide self-employed persons into agricultural and non-agricultural industries to better understand the data. Among non-agricultural self-employed in Iowa, 69.9% were born in Iowa, with rates of 76.4% and 61.6% for non-MSAs and MSAs, respectively. Thus, non-agricultural self-employed are again disproportionately likely to be homegrown, especially in non-metropolitan areas. For agricultural self-employed in Iowa, 87.8% were born in Iowa, with rates of 88.2% and 86.4% for non-MSAs and MSAs, respectively. Thus, the percentage of homegrown talent is remarkably high for the agricultural self-employed.

The final row in table 1 shows rates for self-employed college graduates. These educated entrepreneurs may be especially successful at building and growing their businesses (Levine and Rubinstein 2017). Among all self-employed college graduates in Iowa, 66.7% were born in the state. The corresponding rate is 76.0% in non-MSAs and 60.5% in MSAs.

Table 2 provides more detail about the origins of Iowa residents born outside the state. I discuss only the highlights for brevity. Persons born outside of Iowa are divided into three groups based on their birthplace—neighboring states, the rest of the United States, and foreign born. Neighboring states are those that share a border with Iowa and include Illinois, Minnesota, Missouri, Nebraska, South Dakota, and Wisconsin. Overall, these six neighboring states combine to produce more future Iowa residents than the rest of the United States combined. Thus, Iowa’s in-migrants disproportionately originate from neighboring states. Finally, 7.0% of Iowa adult residents are foreign born, but the rate is only 4.9% in non-MSAs compared to 9.9% in MSAs.

Table 2. Iowa Adult Residents by Birth Place
Iowa Residents Non-MSA Residents MSA Residents
A. All Adults Ages 22+
Born in Iowa67.3%70.9%62.2%
Born in Neighbor State13.4%13.9%13.6%
Born in Rest of U.S.12.3%10.3%14.3%
Foreign Born7.0%4.9%9.9%
B. College Graduates
Born in Iowa61.3%69.0%58.1%
Born in Neighbor State16.4%16.7%16.8%
Born in Rest of U.S.15.0%10.8%16.4%
Foreign Born7.2%3.5%8.7%
C. Self-Employed Persons
Born in Iowa73.9%80.4%64.1%
Born in Neighbor State11.3%10.6%12.6%
Born in Rest of U.S.9.4%5.8%13.6%
Foreign Born5.4%3.2%9.8%
D. Non-Agricultural Self-Employed Persons
Born in Iowa69.9%76.4%61.6%
Born in Neighbor State12.6%12.0%13.3%
Born in Rest of U.S.11.1%7.4%14.5%
Foreign Born6.5%4.2%10.6%
E. Agricultural Self-Employed Persons
Born in Iowa87.8%88.2%86.4%
Born in Neighbor State7.1%7.9%6.3%
Born in Rest of U.S.3.5%2.7%4.7%
Foreign Born1.7%1.2%2.6%
F. Self-Employed College Graduates
Born in Iowa66.7%76.0%60.5%
Born in Neighbor State16.2%15.9%17.2%
Born in Rest of U.S.12.0%6.7%14.6%
Foreign Born5.0%1.3%7.7%
Source: Author’s estimates from the 2015–2019 American Community Survey. All estimates are limited to ages 22 and older. College graduates are defined as persons with a bachelor’s degree or higher level of education.

Iowa has a distinct climate, culture, and combination of local amenities that likely make it on average a more attractive location to native Iowans and persons from nearby states with similar characteristics than to persons born in distant states or foreign countries. This is especially important for rural areas and smaller cities and towns in Iowa. Natives and nearby neighbors have greater familiarity, appreciation, and adaptation to the charms and challenges of living in Iowa. Iowa does receive some in-migrants, including from other countries, and should continue to welcome and support all who seek to flourish in the state. However, Iowa’s human talent levels and prosperity are heavily dependent on native Iowans and likely will be for the foreseeable future. Thus, it behooves Iowa to continue investing in and nurturing human talent already in the state including via education and entrepreneurship.

References

Acs, Z. 2006. “How is Entrepreneurship Good for Economic Growth?” Innovations 1(1):97–107.

Autor, D. 2019. “Work of the Past, Work of the Future.” AEA Papers and Proceedings 109:1–32.

Levine, R., and Y. Rubinstein. 2017. “Smart and Illicit: Who becomes an Entrepreneur and Do They Earn More?” Quarterly Journal of Economics 132(2):963–1018.

Ma, J., M. Pender, and M. Welch. 2016. “Education Pays 2016: The Benefits of Higher Education for Individuals and Society.” Trends in Higher Education Series. College Board.

Ruggles, S., S. Flood, R. Goeken, J. Grover, E. Meyer, J. Pacas, and M. Sobek. 2019. Integrated Public Use Microdata Series USA: Version 9.0 [dataset]. Minneapolis, MN: IPUMS.

Winters, J.V. 2020a. “What You Make Depends on Where You Live: College Earnings across States and Metropolitan Areas.” Thomas B. Fordham Institute: Washington, DC.

Winters, J.V. 2020b. “In-state College Enrollment and Later Life Location Decisions.” Journal of Human Resources 55(4):1400–1426.

Wozniak, A. 2010. “Are College Graduates More Responsive to Distant Labor Market Opportunities?” Journal of Human Resources 45(4):944–970.

Suggested citation

Winters, J. 2021. "The Origins of Talent in Rural and Urban Iowa." Agricultural Policy Review, Spring 2021. Center for Agricultural and Rural Development, Iowa State University. Available at www.card.iastate.edu/ag_policy_review/article/?a=124.