How the Long Recession Is Changing Puerto Rican Migration

How Much Do We Really Know About Puerto Rico, Anyways?

For today’s post, I’ll be taking a second to look at migration in Puerto Rico, very much because there’s an ongoing public discussion about Puerto Rico’s ongoing economic and debt crisis. One of the most interesting takes I’ve seen thus far, tying the debt issues to population loss, was from Wall Street Journal’s Nick Timiraos. That got me thinking that, heck, there’s tons of data about Puerto Rico, so surely we can get some interesting migration stories too, right?

Migration in Puerto Rico

Reviewing the Basic Data

Well, it turns out I was wrong on the “tons of data” front. As best I can tell, the only reliable source on migration from Puerto Rico to the United States from 1910 to the present is the American Community Survey/Puerto Rican Community Survey from 2005–2014. There does not appear to be any direct data source for most years. The Population Estimates Program has some total net migration data back to the 1990s, but it looks incredibly wrong to me for most years. Fairly reliable fertility/mortality data does exist going back to 1910, so that can be used to develop a residual roughly equal to total net migration. And comparing this residual to ACS/PRCS estimates of total net migration (as well as the most recent PEP estimates, which seem fairly reliable), yields very similar results, as shown below

Okay, so it seems like total net migration can be guessed at. But what about migration to the United States? Maybe Puerto Rico gets variable or extreme international migration. How can we narrow down just migration to the United States?

Well, again except for recent years, which I’ll get to, we’re really left with coming up with some kind of residual-based estimate. So for example, each census since 1910 has included Puerto Rico, and included the non-PR-born population as well. We can derive an approximate estimate of net migration of the continental-US-born population by looking at changes in this population, which can only be driven by deaths and net migration. If we assume the US-born population has similar mortality to the PR-born population, and do the same for the foreign-born population in Puerto Rico, we can get net migration rates broken out by place of birth. This isn’t quite the same as US-PR migration, as foreigners may move US-PR, while US-born people may move abroad from PR, but these numbers should be a reasonable approximation.

Except, wait, that doesn’t work. The moderately positive US- and foreign-born flows in most years don’t even get close to offsetting the flows of Puerto Ricans to the United States, so we’re left with a big, and volatile, unaccounted gap. Sure, there are some shared trends, but there’s also a lot of unexplained volatility.

Yikes. What happened?

It’s hard to say. I think my total net migration number, however, is almost certainly the most reliable figure. I should also note that the limited Census data I have from these back years suggests that gross volume of migration is much higher than net volume. Furthermore, much migration seems to be temporary. This means that the tie between decennial Census data and annual flows is likely to be tenuous, and the margin of error is likely to be large. If I had to guess, I’d say that my foreign-born and US-born migration rates for Puerto Rico are more-or-less correct, as is the total migration, but the PR to US flow is wrong. So, if we take my total migration, subtract foreign- and US-born flows, we should get just Puerto Rican flows, which should be overwhelmingly to the United States. Below is the revised graph.

So this last-best graph shows that migration for Puerto Ricans was deeply negative in the 1940s, 1950s, and 1960s. It rose to much more moderate levels by the 1970s to 1990s. But as of the early 2000s, it began another steep decline. Remarkably, this most recent decline has occurred among Puerto Rican-born individuals, the foreign-born, and US-born individuals. That’s in fairly stark contrast to the post-war years, when immigration by the US-born partially offset islander outflows.

Population in Decline

Building a Long Time Series

We have census data on Puerto Rico’s population going back to 1765. Yeah. Gotta love Spanish colonial administrative records. I’ve annualized the data using several methods. From 1765–1910, I simply take an annualized growth rate between each Census. For 1910–2000, I adopt Census years, and extrapolate between by taking a weighted average of a simple rate-based annualization, and annual population data estimated by the UN and by some academics who’ve looked into the period. For 2000–2015, I slowly shift over to using an average of PEP and ACS estimates. All estimates are very similar for most years, as I’ll show. But first, my core population estimate:

When the character in West Side Story joked about Puerto Rico emptying out, that fear was unfounded: robust natural fertility and falling mortality allowed the island to have population growth despite huge outmigration during the last emigration boom. Those conditions have ended. The mortality rate in Puerto Rico has actually risen slightly since its lowest point in the 1980s, while the birthrate has continued to fall. In 1955, the birth rate (35.2 per 1,000 people) was 5 times the death rate (6.7 per 1,000 people). In 2015, the birth rate was just 15% higher than the death rate, and falling rapidly. Within a few years, not only will Puerto Rico be experiencing large outmigration, it will also experience natural population decline.

That’s what causes that sharp turn in population. And, to be clear, that’s a really sharp turn. In my database of state populations going back to 1630, I find that, aside from temporary disruptions caused by WWII, population declines from 1 decade prior are quite rare. Here, let me give you a list of every significant decade-long population decline since 1630, ecluding WWII, as well as key reasons for most of them:

As you can see, most of these declines come from really specific causes: war, natural disasters, commodity booms, or trends in rural/urban distribution. Puerto Rico’s recent decline is one of the most severe since the declines in Wyoming and West Virginia in the 1980s. And of course, I only track up to 2014: with 2015 included, Puerto Rico would decline even more than them.

And there’s a reason for these trends. Quite simply, it’s not just how many Puerto Ricans are leaving that’s driving the population decline, but who they are.

Trends in Puerto Rican Migration

An Exodus of Young Families

Who moves is as important as how many people move, as I’ve explained many times. This is especially the case for Puerto Rico. Even as Puerto Rico is burdened by a crushing load of debt, its tax base to support that debt is shrinking, and shrinking at what is likely to be a faster and faster rate. The reason why is shown below, where I prove net migration rate to the United States by age from 2007 to 2014. This does not include international migration beyond the United States, because I have no data on international outflows by age. But I can tell you that, if I included just the international inflows, the downward trends I discuss below would be even more severe. As such, we should consider these trends as likely to be perpetuated in non-US migration from PR as well.

As is quite clear, migration is declining at the fastest rate for the youngest Puerto Ricans. And what an rapid rate of decline it is! Losing almost 3.5% of your young adult population in a year is an astonishing decline. It’s the largest such decline in 2014 of any state except Alaska (where the data is really flukey anyways). And apparently, those 20–34 year olds are taking their kids with them, hence the parallel trend among 1–4 year olds. Migration for 5–19 year olds falls between young parents and middle-age migration, again suggesting the people leaving Puerto Rico tend to be families. Just to be sure, I checked rates by family status too: sharp declines for all categories except widowed… and migration among widowers actually improved. Divorced people had the smallest decline, separated the most, married and never married about equal.

Meanwhile, net migration for those 60 and older is unchanged. Retirees are pretty much staying in place.

The result of all this is simple. High-mortality populations like retirees will stick around, high-birth populations like young families will leave, and thus the mortality rate will rise and the birth rate will fall. If these trends continue, Puerto Rico’s population will fall vastly more than I think most people expect.

How much more? Well, at the risk of fear-mongering, let me put out some numbers. Let’s say that Puerto Rico’s birth rate continues declining at the pace it has for 15 years (which is the same pace of decline as the previous 15 years, and the same pace as the previous 15 as well: so it seems like a fair guess). And let’s assume the mortality rate also continues to creep higher at about the rate it has been for the last 50 years or so.

Let’s then assume that net migration sits at -1.5% indefinitely. This is actually an improvement from current rates around -1.8% or higher, so I’m being generous here and assuming that things get a little better.

Given these fairly reasonable projections, Puerto Rico’s population will decline by half a million people by 2025. It will fall another half-million by 2036. By 2050, there will be under 2 million Puerto Ricans.

Now look: these trends are not going to continue for 35 years. My point isn’t that this is what will happen. But even with a range of plausible migration rates, population is anemic at best. The chart below shows population forecasts under 7 different migration scenarios. The only scenario under which Puerto Rico avoids decline is achieving persist 1% migration. For reference, the actual 2020–2050 average migration rate needed here to keep 2015 population even with 2050 is 0.41%. For reference, the last time Puerto Rico had 0.41% migration for even a single year was 1930. The last sustained period of positive net migration for Puerto Rico, from 1916 to 1934, had an average rate of 0.25%. In other words, in order to maintain its population, Puerto Rico will need to attract a level of migration it has not attracted in at least 100 years. And if migration remains at current levels, population will eventually fall by about 1.5 million people.

Try supporting anything like the current debt load with 1.5 million less people. I dare you.

Two caveats, with opposite effects: first, migration, as I noted, is age-biased. I already project rising mortality and declining births, but it’s worth noting that if migration remains highly age biased, then my birth rates are probably overstated and my death rates are understated. In other words, if this age bias continues, population will fall even faster than I currently project.

On the other hand, migration also selects for mobility and opportunity. It may be that the Puerto Ricans with any shot at leaving already have. Foreign-born and US-born people are probably the least tied to the island, and have indeed been leaving at record rates, but those populations may exhaust themselves in a few years, while remaining Puerto Ricans remain as a hardcore migration-resistant remnant. So this kind of selection bias may imply that a rise to -1% or -0.5% net migration is a real possibility even if the economy does not improve. On the whole, I would say these effects balance out. I may be too pessimistic on migration, but I also may be too optimistic on natural population growth.

The one bright spot for Puerto Rico’s fertility is that female net outflows have been lower than male net outflows, but that may just be men searching for work, then bringing their family along later. We’ll see if that trend continues in the years ahead.

Renters Are Fleeing While Homeownership Declines

I don’t know the details or policy dynamics of Puerto Rico’s long recession and financial troubles. But what I do know is that, when you graph migration by housing tenure, it looks weird:

So, basically, outflows from Puerto Rico are about renters leaving. Homeowner migration is breakeven. This trend predates the current recession, although the gap has widened markedly as renter inflows have fallen and renter outflows have risen.

I don’t know what’s going on here. Knowing absolutely nothing about the property market in Puerto Rico, this looks like a classic example of excessively high rent pushing people to emigrate. But I’m not sure that makes sense, because the renter population has actually been steadily rising since 2007, while the owner population has been sharply falling.

So, there are fewer owners, but not because they’re leaving. And there are more renters, even though their leaving. I dunno. Maybe formerly owner-occupied property is being converted to rental space while the former owners downshift to rentals and former renters emigrate? I’ll let the Puerto Rico economics and real estate experts explain this trend; I certainly can’t.

Mixed Migration Trends by Income

The chart below tracks net migration by income level. I’ve broken the data out into just four groups for simplicity: no income, under $25k, $25k to $75k, and over $75k.

Breaking down migration by income category doesn’t yield an extremely clear trend. Sure, in 2014, the $75k+ group has big outflows, but they had net inflows in 2010, versus similarly big outflows in 2009. They’re really volatile, and seem to be tracking the trend of the $25k to $75k group, who’ve basically stayed at about the same migration rate.

The real changes in migration by income are among the unemployed and somewhat lower income: people potentially impacted by Puerto Rico’s insanely high minimum wage. Not to put a policy spin on this, but here’s your policy spin: people whose employment/earnings potential is unconstrained by the disemployment and informalization effects of a high minimum wage have seen roughly stable (if still severe) out-migration. Outmigration among the lower-earners only became more widespread during the economic crisis, which caused the disemployment effect to grow dramatically, leading the costs of migration to be worth it for a larger number of people.

If you wanted to read into the 2014 declines, you might think that the evident worsening of Puerto Rico’s financial situation made higher-earners wary of possibly rising taxes. But I’m not sure there’s enough evidence to make a strong case for that.

How Far Should You Go?

Substitution Across Migration Ranges

The chart below shows various migration rates. A municipio in Puerto Rico is roughly equivalent to a county in the United States, and so the “total mover rate” is outflows to the US, the intermunicipio rate, and the intramunicipio rate. The total migration rate drops the “intramunicipio” rate, as same-county moves aren’t usually considered any form of “migration.”

You’ll notice that, as intramunicipio movement has fallen, outflows to the United States have risen. Personally, I don’t think that’s an accident. I don’t have international emigration data, but I suspect if I did, it would make the chart even more balanced. I suspect we would find that the “total mover rate” in Puerto Rico is very stable over time., as it appears to be even without international outflows.

Migration, even short-range migration, is directly related to opportunities for advancement and a better life. The decline in intramunicipio movement suggests fewer Puerto Ricans found such opportunities in their town, and had to look elsewhere. The share moving across municipios declined ever so slightly as well. Migrants headed to the United States were not necessarily going to stay put anyones: but instead of moving to Orlando, they may have just moved to Ponce. The search for employment and opportunity almost always starts local, and usually only goes beyond the local area if local opportunities fail to materialize. So we see a trade-off in this case between local-area migrants and migrants to the United States. The result is that migratory movement now exceeds non-migratory movement.

It is possible that these people, who in more normal times would have moved locally, are more socially or emotionally tied to Puerto Rico than previous generations of emigrants. If this is the case, and that’s a big if, then a rapid, decisive, effective policy change that can make even incremental improvements in economic conditions could trigger these “loyal emigrants” to return home swiftly. That’s a huge if, and it depends on the existence of such a policy (such as de-tethering from the Federal minimum wage). But it is a possibility, and suggests an avenue for advocacy for those concerned about Puerto Rico.

Conclusion

Migration from Puerto Rico has risen dramatically in recent years, to levels that rival those seen during the extreme outflows in the 1950s. Given reasonable assumptions about future population demographics and migration rates, Puerto Rico’s population is likely to continue declining, making its financial obligations even tougher to bear. Indeed, a key problem facing Puerto Rico is not just the size of migration but its profile. Today’s newly-minted Puerto Rican diasporan is more likely to be a young low-income family moving out of a rental unit. They also moved to a fairly weak U.S. economy, meaning they may not be firmly rooted in the United States, while they may retain strong ties to Puerto Rico. As such, positive developments in Puerto Rico could induce vigorous return migration in the next few years. That’s not guaranteed, but it is possible. Such positive developments would most likely need to address the causes of low-income, unemployed, family, and renter outmigration. I don’t know the whole policy infrastructure in Puerto Rico but, were it a continental state, I’d say you need to find ways to lower the cost of living and doing business, but that just seems insane to me because, well, I don’t think Puerto Rico has a pricey reputation, aside from for low-skilled labor.

See my last post on how to read and interpret PEP data.

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I’m a graduate of the George Washington University’s Elliott School with an MA in International Trade and Investment Policy, and an economist at USDA’s Foreign Agricultural Service. I like to learn about migration, the cotton industry, airplanes, trade policy, space, Africa, and faith. I’m married to a kickass Kentucky woman named Ruth.

My posts are not endorsed by and do not in any way represent the opinions of the United States government or any branch, department, agency, or division of it. My writing represents exclusively my own opinions. I did not receive any financial support or remuneration from any party for this research. More’s the pity.

Cover photo source.