EXPORTING HUMAN CAPITAL. In an earlier cash crunch in Illinois, the state's Board of Higher Education proposed to eliminate a number of degree programs. Some made the hit list for admitting what the planners perceived as disproportionately many overseas students, that despite many such students hiring out at LaSalle Street trading houses or at local colleges.

Now comes another Illinois cash crunch. There's a different set of planners, but they might raise the same objections, particularly if they fear human capital leaving the United States.

We surveyed 1,224 foreign students from dozens of nations who are currently studying at U.S. universities or who graduated in 2008. The majority told us that they didn’t think that the U.S. was the best place for their professional careers and they planned to return home. Only 6 percent of Indian, 10 percent of Chinese, and 15 percent of European students planned to settle in the U.S.

Many students wanted to stay for a few years after graduation if given a choice—58% of Indians, 54% of Chinese, and 40% of Europeans. But they see the future being brighter back home. Only 7% of Chinese students, 9% of European students, and 25% of Indian students believe that the best days of the U.S. economy lie ahead. Conversely, 74% of Chinese students and 86% of Indian students believe that the best days for their home country’s economy lie ahead. National Science Foundation studies have shown that the “5 year stay rates” for Chinese and Indians science and engineering PhD’s have historically been around 92 % and 85% respectively (NSF tracks these 5 years at a time, and the vast majority stay permanently). So something has clearly changed.

Never mind that higher education runs a balance of payments surplus, something one would expect of a country with a comparative advantage in advanced-technology, skill-intensive products.

Cold Spring Shops headquarters, mid-October.

As Insta Pundit notes, "Talent goes where it's rewarded."