Due in large part to a lack of high-paying jobs, Wisconsin has been struggling over the last decade to attract and keep college graduates in the state, a phenomenon known as the ‘brain drain.’

According to census data, Wisconsin experienced a net loss of 11, 224 people aged 25-39 holding a college degree from 1995-2000.

Analysts contend the loss of this demographic is significant because, as a group, young workers tend to be more entrepreneurial than their older counterparts. Economic growth can be stalled without that risk-taking quality in an economy, as has occurred in Wisconsin, according to David Ward, president of Madison-based NorthStar Economics.

“We’ve lagged in the formation of new businesses, and we haven’t seen many spin-off companies, so our high-end economy has been slow-growing” Ward said.

Wisconsin is not alone in suffering from the “brain drain,” as statistics show a net loss of young, educated workers in more than half of the states. The biggest beneficiaries of this migration have been states in the west and south, with Nevada, California, Georgia and Colorado leading the way, while the majority of states in the Northeast and Midwest have experienced an exodus of young, skilled workers.

Wisconsin’s failure to avert the “brain drain,” however, has run counter to the brain gain of neighbor Minnesota, which boasted a net gain in the number of college graduates age 25-39 from 1995-2000. While Wisconsin has clung to its manufacturing and agricultural past, Minnesota has sought high-tech growth, leading to a widening gap in per capita income between the two states.

“Essentially, Minnesota’s entire culture has been growth oriented, starting with medical devices 35 years ago,” Ward said.

A study by the Brookings Institution shows college graduates move in large numbers to medium and large-sized urban areas, but Milwaukee has not been among the destinations of choice. Like Cleveland, Pittsburgh and other “Rust Belt” cities, Milwaukee’s traditional manufacturing core has not been able to compete for college graduates with the high-tech industries found in cities such as Seattle, Austin and San Francisco.

The one exception to the brain drain in Wisconsin has been Madison and Dane County. Ward credits one of the state’s highest per capita income rates and preponderance of “high-value” companies in explaining why Dane County has been able to buck the statewide trend.

To stem the tide of college graduates leaving other parts of the state, Gov. Jim Doyle’s Grow Wisconsin initiative seeks to create high-paying jobs by leveraging for more federal investment and increased investment capital to the state. Milwaukee is being earmarked for financial, cultural and entertainment improvements to make the city more attractive to college graduates.

Ward is glad Wisconsin is taking active steps towards reversing the “brain drain,” but warns they may be counter-balanced if the state continues to cut funding from higher education.

“Politicians on both sides of the aisle recognize the need to increase venture capital,” Ward said. “But they’ve only paid lip-service to improving higher education, and without a college-educated workforce, our economy will continue to grow slowly.”