Step 3: Choose Your Target States by Better Understanding the US Economy


Go back to Our 7-Step Approach

By Rajkamal Rao 
If you have completed Steps 1 - 2 correctly, you would, by now, have:
  1. Defined your brand & decided what you want to do in your career.
  2. Genuinely abandoned the madness that comes with school rankings.
Our next important task is to choose the states you will likely study in.  The United States is a powerful, wealthy economy.  From the outside, people looking in think that all 50 states in the country are equally well off.  Nothing could be further from the truth.

As a student intending to travel to the United States, you need to understand how individual states stack up against one another.  You improve your odds of doing better on your investment simply by choosing the right state.

A small history lesson here is probably appropriate.  The United States is structured as a republic with a central government - called the Federal Government - responsible for things only a central government can do, such as print money and defend the nation.  But the real political/economic power lies in the 50 states.  The 10th amendment of the US Constitution simply states that any power not granted to the Federal Government in the Constitution is, by default, given to the individual states in the Union.

What this means is that the 50 states have their own laws and policies for just about everything - from criminal justice to environmental protection to funding public education.  For example, some states have very strict laws regulating guns, others have loose laws.  Some states tax their residents' income heavily but others have no state income tax.  One state has laws to be more friendly to employee unions, whereas a neighboring state may pass laws to be more friendly to attract businesses.  In fact, the states are 50 different laboratories fine-tuning their laws not only to reflect the will of their residents but also to stay competitive in the global marketplace of ideas.

The effect is that the 50 states are not much different from 50 students in a class - each with his or her own methods to prepare for and do well on a test.  Consequently, students - and states - perform differently when the results are announced.

Each year, CNBC publishes a ranking of the states based on how easy it is to do business in each state. In so doing, CNBC says it looks at nearly 60 factors including the workforce, economy, infrastructure, cost of doing business, quality of life, and education.

Image Source: CNBC (2019)

States that are doing economically better are naturally better bets for students.  It is easier to find summer internships and jobs in such states than others.  We recommend looking at three important macro-economic indicators.

Step 3a. The unemployment rate

Step 3b. GDP Growth

Step 3c. GDP

Now that you have looked at 3a, 3b and 3c, what should you do?
  1. Stick to the top 25 states in 3a - call this subset 3a.
  2. Stay with states in the top three quintiles in 3b - call this subset 3b.
  3. Only consider the top 25 states in 3c - call this subset 3c.
  4. Now, choose three states which are present in each subset 3a, 3b and 3c.   For example, you could select any three states among Texas, Ohio, Massachusetts, Wisconsin, Maryland and Minnesota.
  5. Then, choose two states with real low unemployment rates alone - from 3a - for example, North Dakota and Nebraska; or North and South Dakota.
  6. You now have your own universe of target states.
This means that if your favorite education consultant asks you to consider schools in Nevada or Rhode Island - simply because he knows he can "safely place" you in schools in those states - you should soundly reject that advice.  Because what's good for his placement statistics (and career) could well be bad for you and your own career!

There are, of course, exceptions to the above approach.

Where do you want to go next?
  1. Step 1: Prepare Better. Define Your Brand & Decide What You Want
  2. Step 2: School Rankings Matter Less Than You Imagine, So Think Different
  3. Step 3: Choose Your Target States by Better Understanding the US Economy
  4. Step 4: Identify Occupations in Demand and Industries that are Trending Upward
  5. Step 5: Review School Selection Factors, Including Financial Considerations
  6. Step 6: Finalize the List of Schools
  7. Step 7: Finalize your Application

Go back to "Rao Advisors - Home".

A Note About Premium Services

Our promise is to empower you with as much high-quality, ethical and free advice as is possible via this website.  But students often ask us if they can engage with us for individual counseling sessions to complete this and other steps.

Individual counseling is part of the Premium Offering of Rao Advisors and involves a fee.   Even if you take advantage of our services, you are still ultimately in charge.  This principle is ground in our fundamental belief that you alone should be responsible for the career decisions you make.

We suggest that you review our Note on Premium Services for more information.  Or you may
contact us directly for more information about our Premium offering.

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