For a state built on world-class hospitals, universities, and a biotech cluster that draws talent from around the globe, 2026 has brought an uncomfortable question: is the Massachusetts economic model starting to crack?

People and companies are leaving

Massachusetts lost 33,340 net residents in the year ending July 2025, with young adults leading the departures. The exits haven’t been limited to individuals. SynQor relocated with roughly 250 jobs, Analogic moved about 500 positions out of state, and both Zipcar and Panera have shifted operations elsewhere. In January 2026 alone, ten companies eliminated a combined 905 jobs. The state is now one of only four in the country with fewer private-sector jobs than it had before the pandemic — a shortfall of roughly 24,000 jobs since January 2020.

Three pillars, all under strain at once

What makes this moment different from past slowdowns is that higher education, health care, and biotech — the three industries that have anchored the state’s economy for a generation — are all showing stress simultaneously.

Higher education: Twelve Massachusetts colleges have closed or merged over the past decade. UMass Chan Medical School’s PhD admissions fell from 73 students to just 13 in a single year, and Harvard is cutting its science PhD enrollment roughly in half.

Health care: Only six of the state’s nearly two dozen hospital systems turned a profit last year. Mass General Brigham has been managing a $250 million budget gap, while UMass Memorial lost $86 million in the first half of fiscal 2025 alone.

Biotech: Venture capital’s share of funding to Massachusetts life sciences companies has declined, the number of funded companies has dropped by 13%, and lab space built during the pandemic-era boom now sits vacant at record levels — a backdrop to the 745 biotech layoffs recorded in the first quarter of 2026 alone.

Federal policy adds pressure

Boston University economist Mark Williams has estimated that tariffs alone could eliminate nearly 80,000 Massachusetts jobs and cost the state $1 billion in tax revenue. State officials have also flagged federal funding being redirected toward other states, along with a proposed $424 million in Medicaid cuts that would hit Massachusetts hospitals directly.

The cost-of-living squeeze

Housing remains the biggest single driver of people leaving the state, compounding the pressure on employers trying to hire. A four-year degree at a private Massachusetts university now commonly exceeds $400,000 all-in, and the state has the third-highest electricity rates in the country — both of which show up in household budgets long before they show up in state economic data.

What the state is doing about it

Governor Maura Healey’s administration has rolled out a $4 billion Mass Leads Act aimed at the life sciences and technology sectors, a $400 million DRIVE Initiative, and a new Competitiveness Council, while pointing to more than 30 companies that have recently expanded in the state. House Ways and Means Chair Aaron Michlewitz has highlighted resilience in state revenue numbers as a counterpoint to the more alarming headlines.

Those efforts have run into resistance, though: a broader tax-cut package was significantly scaled back, new revenue-raising proposals didn’t survive the legislative process, and a commercial property tax proposal from Boston Mayor Michelle Wu was rejected in the Senate.

Where this leaves Massachusetts

None of this means the state’s economy is collapsing — job growth is still outpacing the national average on a monthly basis, and the “millionaires tax” continues to generate billions more than originally projected, evidence that high earners aren’t fleeing en masse. But the simultaneous strain across education, health care, and biotech, layered on top of a real (if modest) population decline, is a meaningfully different economic story than the one Massachusetts told about itself for most of the past two decades. Boston Made’s Economy desk will keep following each of these threads as new data comes in.