This article analyzes factors related to the rural/urban residence choice of college-educated adults using a unique data set resulting from a 2007 stratified random sample survey of Iowa State University alumni graduating between 1982 and 2006. Rural origin is the most significant predictor of rural residence choice. An important finding is that nonpecuniary goals and values such as family tradition, being respected by friends, and building a business for one’s children to inherit have more weight with Iowa State University alumni who reside in rural areas after college than do monetary returns. This implies that incentives such as tax breaks will not work, or will be too expensive, to attract or retain college graduates in rural areas. Second, entrepreneurship rates are higher among Iowa State University alumni in rural areas and rural entrepreneurs tend to have local or, at least, rural roots. This finding lends support to the increasingly popular “grow your strategies†for rural business development.
