Attracting Human Capital: The driving Forces Behind the Migration of University Graduates

Economic development can be attributed to many sources. One theory is that talented people are the driving force behind the growth of economies. In his thesis, Michael Kurtz focuses on the driving forces behind the migration of this group of people, in order to find out why talented individuals move to certain places. A literature study is performed which focuses on the proper definition of talented individuals. A comparison is made between two definitions: (a) human capital, which emphasizes education level, and (b) the Creative Class, which emphasizes area of work and focuses on people that work in creative fields. Furthermore, a framework of relocation decisions is constructed which consists of three categories: (1) economic, (2) social, and (3) natural/cultural reasons. Findings show that human capital outperforms the Creative Class as an indicator for economic development. A survey, distributed among graduates of the Erasmus University of Rotterdam, shows that the relocation decisions of this population are primarily economic and socially motivated. Further analysis shows that proximity to job and being near one’s spouse are particularly important reasons for relocation. This contradicts other recent findings in literature which suggest that urban amenities - consumption or lifestyle advantages that are linked to the environment and quality of a city - play a big role in graduates’ relocation decisions. The findings of this thesis could have various implications for policy makers. For municipalities who want to attract highly skilled individuals, it might not be wise to simply focus on cultural venues, parks, or the exploitation of historic landmarks. In order to gain a skilled labor force, a proper course of action might be to create a hospitable environment for innovative companies and invest in human capital.