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Maryland’s Early-Career Talent Drain: Why Young Workers Are Leaving & What Maryland Can Do About It
Feb 16, 2026
How Workforce Migration Impacts Maryland’s Competitiveness, Economy and Fiscal Outlook
Prepared for publication by the Maryland Chamber of Commerce, based on research conducted by undergraduate researchers at the University of Maryland School of Public Policy in December 2025.
Recent data indicates that Maryland’s economic competitiveness is at a critical juncture
Maryland is facing a growing outflow of young workers aged 18–28 — the core of its emerging workforce and talent pipeline. This trend is reshaping the state’s economic competitiveness, business climate, tax base, and long-term growth trajectory.
Key Findings from the Research:
Maryland suffered the 5th-largest net loss of recent graduates in the United States — 8,881 students lost to other states. Young workers are increasingly relocating to states with:
- Lower housing costs
- Lower individual tax burdens
- More flexible licensing/workforce pathways
- Targeted workforce incentives for new graduates
The pattern represents a structural challenge, not a short-term blip or county-specific anomaly.
Why It Matters: Business & Economic Implications
Maryland’s business community depends on a growing early-career workforce to:
- Fill open jobs
- Start new companies
- Support professional services and innovation sectors
- Grow its tax base
- Attract new investment
Research shows new residents generate an economic lift faster and more efficiently than corporate subsidies, due to immediate income, sales and property tax contributions. Yet Maryland’s economic metrics show vulnerability:
- New business applications down 6% (2024)
- Small business survival rates down 7 percentage points
- Jobs per business down 64%
Meanwhile, neighboring states strengthened the same metrics during the same period. Talent shortages are contributing to:
- Slower business formation
- Reduced job creation
- Workforce mismatches
- Declining competitiveness in high-value sectors
Push & Pull Factors Driving Maryland’s Out-Migration
The research found that young workers are weighing a mix of economic, career and quality-of-life considerations when deciding where to live and work.
Top Push Factors in Maryland
- High housing costs + restrictive housing supply
- High effective state tax burdens on individuals
- Licensing and credentialing barriers for certain professions
- Fewer early-career pathways in tech, STEM and skilled trades
- Higher cost of living relative to wages
Top Pull Factors in Destination States
- Lower cost of housing
- Lower or no individual income taxes
- Loan repayment incentives for STEM and healthcare fields
- Barrier-removal strategies (licensing, hiring, credentialing)
- Targeted early-career placement incentives
States benefiting from Maryland’s out-migration include: Pennsylvania, Virginia, Florida, Texas and the Carolinas
Policy & Strategy Playbook for Maryland
Based on the research and strategic translation for Maryland’s competitiveness context, the emerging playbook includes:
1. Targeted Retention Incentives for Early-Career Workers. Examples:
- State-supported loan repayment
- Graduate retention tax credits
- Tuition reimbursement tied to Maryland-based employment
- These incentives are already succeeding in neighboring states.
2. Housing Affordability & Workforce Mobility Reforms. Opportunity areas include:
- Reducing regulatory barriers to new housing supply
- Modernizing zoning for workforce housing
- Supporting employer-assisted mobility programs
3. Barrier Reduction in Licensing & Apprenticeship Pipelines. Addressing the following helps Maryland compete with states lowering their barriers:
- Licensing friction
- Credential transferability
- Restrictive apprenticeship ratios
4. Tech & STEM Retention Strategy. This includes aligning:
- Tech company incentives
- STEM graduate retention
- Early-career hiring pipelines
Maryland is losing both STEM talent and STEM firms (e.g., BigBear.ai, IonQ) to states with lower operating and compliance costs.
5. Education-to-Employment Alignment. Local pilot models show success when the following coordinate earlier to support postsecondary and workforce readiness:
- Community colleges
- Employers
- K-12 systems
Bottom Line
Maryland cannot maintain long-term economic competitiveness without retaining more of the young workers it educates.
Young worker retention directly impacts labor force growth, new business formation, tax revenues, innovation capacity, sector competitiveness and fiscal sustainability.
States that win the battle for talent are building long-term growth. States that lose it face slower growth, weaker business dynamism and deeper budget pressures — especially in a high-cost environment.
Maryland has the assets to compete — but the research shows other states are acting more aggressively to court the same demographic.
Empirical Insights
1. Regression Modeling Identifies STEM & Education Degrees at Risk. The logistic regression model developed by the UMD research team found:
- Workers holding STEM degrees were significantly more likely to leave Maryland.
- Workers holding Education/Social Services degrees were likewise more likely to migrate out of state.
- This suggests that Maryland is educating talent in critical fields — and other states are capturing the downstream workforce and tax benefits.
2. Housing Affordability Is a Consistent Predictor. Maryland’s heavily regulated housing market places the state at a competitive disadvantage in retaining early-career workers who are price-sensitive, mobile and increasingly remote.
3. Licensing & Regulatory Barriers Reduce Labor Market Flexibility. Licensing requirements and restrictive apprenticeship ratios limit workforce entry in skilled trades, discouraging young workers and reducing employer hiring flexibility.
4. Wage Policies Alone Do Not Offset Cost Factors. While Maryland’s minimum wage is among the highest in the nation, the research suggests wage floors do not outweigh the following for new entrants into the workforce:
- Tax burdens
- Regulatory friction
- Housing costs
Lessons from Other States: What Works
The research highlighted examples from states that successfully retain and attract young talent:
- Delaware: Loan reimbursement + licensing barrier removal + faster hiring → large increase in applicants and reduction in job vacancies.
- Virginia: Loan repayment tied to workforce participation in targeted regions.
- Other states: Incentives tied to STEM, healthcare, rural revitalization, and tech sectors.
The common strategic insight: States are now competing directly for young workers — the incentive landscape has shifted from business attraction to talent attraction.
Research Conducted By:
Undergraduate Researchers, School of Public Policy, University of Maryland College Park
Policy Contextualization and Publication By:
Maryland Chamber of Commerce
