Notes on California Migration
Key Trends, High Earners, and the Pacific Northwest
I have generally avoided doing lots of work on the big states like California, Texas, and New York. However, I do occasionally dabble in their migration patterns when it seems there’s interest. In the last week or two, I’ve gotten several questions about California’s migration record, so I figured I’d do something short and sweet on the topic. So, to start with…
What is California’s Migration Record?
The chart below presents net migration rates into California from 1990 to 2016, according to the ACS, Population Estimates program, and IRS.
As you can see, our three sources show pretty similar trends. Migration was slightly negative in the early 90s, then became deeply negative in the mid-90s, rose to more moderate levels in the late 90s and early 2000s, then fell again in the late 2000s, then rose in the early 2010s, and has been roughly stable since. Crucially, net migration is indeed negative for all sources in all periods.
But it should be noted that California’s negative rates are not necessarily atypical. The chart below shows California’s net migration rate ranked versus the other 45 states, 4 Commonwealths, and 1 Federally administered district (if you didn’t get that joke, don’t worry about it, just move along):
As you can see, in the mid-90s, California really did have one of the worst, or even the worst, net migration rates in the country. Since then, it has fluctuated widely. It’s always been in the bottom-half, just as it has always had negative total net migration, but the exact rank order has varied.
Right now, over the last 5 years, California has one of the best medium-term accumulated net migration rates it has had in a long time. Indeed, not since probably the 1980s has California had as close to positive net migration as it currently has.
So there is no reason, based on these headline numbers, to worry about an “Exodus” from California. Yes, there is a long-running loss of people with various causes, but the sharp, severe outflows happened in the mid 90s and mid-to-late 2000s. That said, in the last few years, it does seem that California’s net migration may be turning negative again. Time will tell.
But Isn’t California Losing Rich People?
Well, no. We actually have pretty good information about California’s net migration by income. For example, here’s net migration by income from 2006–2010 and 2011–2015:
ACS data tops out at a pretty darn low threshold, but basically what we can see is that California does the best job retaining people earning over $50,000, and the worst job retaining low-earners. Now notably, this is individual income. So if you have a person earning $45,000 married to a person earning $35,000, they won’t show up as a $80,000-earning household, solidly middle-class. They’ll show up as a $45k and $35k. On that basis, we can see that California’s weakness does probably extend well into the middle class, with households earning under $100,000 from 2 earners probably still being net losses.
We can check this income association another way: with IRS data!
The chart above breaks the data out by income and age. So we can see that where California truly excels is in attracting young people with money to spend. Indeed, as far as the IRS is concerned, the only households California succeeds in attracting, on net, are households under 35 with $50,000+ in income, and especially those with $100,000+.
We can also see that these relationships change with age. For the young, there’s a clear association between income and movement to California. For the old, however, it’s reversed! By the time we get to retirees, we find that migration out of California rises with income!
So overall, we can say that California seems to struggle to attract low income people of any age, and the only group it attracts at particularly robust rates are young, upper-middle-class, or even very rich, people.
Do Oregon and Washington Have a Special Relationship With California?
Nope!
Here’s California’s net migration balance with Oregon and Washington:
And here’s from all other sources:
Do you see what I see? Because what I see is some strikingly similar lines.
Turns out, California’s net migration record with Washington and Oregon very closely mirrors its net migration record with the rest of the nation.
What is interesting, however, is that even as the Northwest’s share of national population rises, its share of California migration (inflows and outflows) is falling:
Curious!
Conclusion
I don’t have immediate answers for why California’s migration flows are the way they are. There are plenty of tantalizing candidates, from its bleeding-edge social values to its high housing costs to its high taxes to its remarkable scenic beauty, to explain various features of California’s migration flows. But for today, I’ll venture no explanation. It’s enough to point out three key facts:
- While California has persistent negative migration, it is currently far less negative than it has been as recently as the mid-2000s.
- Such gains as California does make are heavily concentrated among young, high-earning individuals. Normally this would be good for natural growth as well, but my suspicion is that the females among these young, high-earning domestic migrants into California also adopt personal norms that are less conducive to high rates of childbirth, though I don’t know for sure.
- California loses people to the Pacific Northwest, but not at any particularly astonishing rate, and trends there closely mirror its wider national trends.
Check out my Podcast about the history of American migration.
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I’m a native of Wilmore, Kentucky, a graduate of Transylvania University, and also the George Washington University’s Elliott School. My real job is as an economist at USDA’s Foreign Agricultural Service, where I analyze and forecast cotton market conditions. 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.
