Last week, the US Census Bureau released its population estimates for 2021 of the country and of their territories. I’ve always been especially interested in net domestic migration figures, which show whether people are arriving or leaving a state. These numbers are interesting because, taken as a whole, net migration patterns likely reveal preferences for moving to different states.
Although people have different preferences in factors such as climate and geography, it is unlikely that net immigration patterns are strongly influenced by them when comparing year to year.
Why? Well, factors like climate and geography rarely change quickly. People know that California has beaches, the American Northeast has leaves, and Colorado has mountains. It won’t shock any resident if it snows a lot in Minnesota. It is unlikely, then, that in any given year many people will move to Colorado because they have suddenly decided that the mountains have a stronger appeal this year than they did last year.
So, what factors may be behind the changes of state? Well, new job opportunities are an important factor. For example, the rise of Silicon Valley drew many people to California to fill the hundreds of thousands of tech jobs created in the 1990s. and 1980 (and after). Changes in the industry, such as the rise of remote work, for example, can also influence people’s plans for where to live.
Another clearly important factor that changes (and is at least somewhat related to opportunities business) is the political environment of a state. The political regime in power and the consequences of its public policies are variables that change frequently and can easily explain migration patterns.
Although there are more factors involved in domestic migration than politics and public policies , I believe it is a better indicator of people’s political preferences than their voting habits. “Voting with your feet” or moving is a valuable indicator because it is much more costly for people than casting their vote in a ballot box.
When voters go to the polls, their vote is unlikely to make a lot of difference. Because of this, the “cost” of voting for one party over another is minimal. It is unlikely that a single voter will lead to the adoption of a specific public policy, and therefore voters are unlikely to receive any benefits or punishments for a good or bad vote.
In this way, voters are little incentivized to devote a lot of time and effort to researching who are the best candidates for them when it comes to public policy. Economists call this rational ignorance. Simply put, your decision to remain ignorant of politics and politics is rational, because the costs of raising awareness (time, effort, etc.) outweigh the benefits.
That said, this cost-benefit calculation usually does not apply to migration. When people move from one state to another, they are sure to come across different laws. When you choose to move from a high-income state to a low-tax state, that decision literally changes your tax rate. On the other hand, when you choose to vote for a politician who supports low taxes, your vote in a state contest has almost a 0% chance of changing your tax rate.
“Voting with your feet”, you slap the face. And fortunately, the United States’ system of federalism ensures that moving to different states, while certainly an investment, is not out of reach. Being covered by a different tax policy when moving to another state is certainly easier than moving to another country, for example.
The biggest losers
The first interesting observation we can take from the Census data is that there are three clear “leading states” that are losing more population. There are two different ways of thinking about a decrease in population.
First, we could think of an absolute reduction in the number of inhabitants in a given state. On the other hand, we could think of how much the population of a given state has decreased in percentage terms. For example, if there were 1,000 fewer people living in Kansas this year compared to last year, that would represent a much larger percentage decrease than if there were 1,000 fewer people living in New York this year compared to the previous year.
Fortunately to facilitate this analysis, the three states with the biggest losses in absolute numbers are among the four biggest losers in terms of percentage. This top 3 consists of New York, California and Illinois, states that have lost more than 100 thousand inhabitants each.
The table above shows two numbers for each state. The first column, net migration, shows the number of people coming from other states, minus people leaving for other states. The second number, population change, shows the total change in population, including net migration (domestic and international), births and deaths.
Population decline in California is far from the norm. In fact, the population of California had been increasing from before 1970 to the year of 1980. However, someone with a keen eye could point out that California’s annual population growth rate has been falling for a long time. Since 1970, California has had significantly smaller population increases year over year. So, would 2016 really be out of trend?
As the chart below shows, the answer is yes. From 2016 to 2021 , the population of California has never been reduced by more than 100 thousand inhabitants per year. But between 2016 and 2021 ? The population change in California (now negative) was a reduction of almost 262 a thousand inhabitants. So California not only continues its trend of lower population growth, but the trend has accelerated.
Illinois has a similar story. The population has been decreasing for years, and that reduction has been increasing year by year. Even so, 2021 represented a significant deviation from the rule. Between 2016 and 2016 ), Illinois lost 79 a thousand inhabitants. In the two previous years, this number was in the range of 50 one thousand . From 2016 to 2021, the state lost almost 114 a thousand inhabitants.
Finally, the loss of 100.020 New Yorkers overcame the losses of 2021 thousand and 50 thousand of the previous two years.
So the population numbers are plummeting, but what about the aforementioned net migration? Well, in all three states, the number of people who moved to other states exceeded the population loss (as shown in the first table above). In other words, the main reason these three states are losing population is because people are moving to, and not coming from, other states.
It is no exaggeration to say that Americans are fleeing these states. States. And which states are gaining population? To no one’s surprise, some of the fastest growing in percentage terms are states in the American West near California.
But Florida and Texas topped both the list of the biggest population increases and that of the biggest levels. of net migration. Between the two, Texas grew the fastest in percentage terms. However, the population increase in neither state has bucked the trend of previous increases. The story seems to be less about where people are going and more about where they are fleeing.
Population and public policy
Bad public policy of California, New York and Illinois are to blame for people leaving these states? The acceleration of emigration from these states in the last two years certainly suggests some relationship with the pandemic, but it is possible that the removal of these states reflects a desire to escape from areas of high population density, where Covid- can spread more easily.
However, considering the net migration to Florida, where population density is greater than California and almost as great as New York, this seems unlikely. Likewise, New Yorkers looking to escape the population density of New York City can easily move upstate, or to New Jersey or Pennsylvania (which are also experiencing population decline).
Fully evaluating this hypothesis would require more detailed information, but I think it is unlikely that the fear of Covid-19 is shifting people from high-density to low-density states.
Remote work can also explain much of this movement. New Yorkers and Californians lucky enough to get high-paying jobs in those states may now be moving to lower-cost-of-living locations.
On the other hand, in the case of Illinois, for example , it seems strange that residents feel the need to leave the state to reduce the cost of living. If you want to move to a rural area, why not move to rural areas of your own state? If they are moving to other major metropolitan areas, what savings would that represent compared to Chicago? Also, how many companies are guaranteeing that remote work will be a permanent option?
Finally, and I think most convincingly, it seems to me that much of this movement may be related to related public policies to the pandemic. Lockdowns, vaccine passports, school closures and other rules to face Covid- are probably intolerable complications for many people. Interestingly, Elon Musk, the largest single taxpayer in the United States, made good on his threat to leave California due to Covid rules-01, and many other people also left the state for similar reasons.
Regardless of the reason, the data is clear. Americans want to get out of New York, California and Illinois. These three states are the biggest (population) losers.
© 2021 Foundation for Economic Education. Published with permission. Original in English.