Bacon's Rebellion

James A. Bacon


 
 

Voting with their Feet

Judging by recently published "domestic migration" numbers, Virginia's ability to attract human capital deserves a polite but restrained round of applause.


 

During the late 1990s, the Internet bubble was expanding like a party balloon, Hollywood and Silicon Valley were minting multimillionaires by the dozens, and the California budget was actually running surpluses. But there was trouble in paradise. In the midst of the greatest wave of wealth creation in the universe, thousands of people were leaving.

 

While Mexicans and other foreign immigrants flooded the Golden State, native residents were bolting. Between 1995 and 2000, according to recently published U.S. Census figures on “domestic” migration, 775,000 more people moved out of California than moved in. Less than five percent were retirees; the overwhelming number consisted of working-age people and their children. The state was hemorrhaging human capital – an early warning signal of the economic debacle to come.

 

Years before Californians decided upon a recall election, citizens were voting with their feet. Moving to another state is expensive and disruptive, but thousands of people were doing it, presumably in search of better employment opportunities or a more fulfilling quality of life.

 

California was one of the big losers in the late 1990s, but not the only one. New York exported 874,000 citizens, Illinois 343,000, and New Jersey 182,000. The greatest beneficiaries of the internal migration within the United States were the South Atlantic states - Florida, Georgia and the Carolinas, which collectively pulled in 1.4 million more residents than they lost.

 

In the knowledge economy, human capital is the fundamental building blocks. By tracking a measure of how people act on their opinions, "domestic immigration" reflects the collective judgment on a state's economic vitality and quality of life more accurately than any opinion poll or magazine survey. By this measure, Virginia performed respectably, netting nearly 76,000 additional citizens through domestic immigration – good enough to rank it 16th nationally as a proportion of the population. Such a ranking qualifies as a solid "better than average," though it douses any pretensions of national leadership. It also raises the question: Can we do better?

 

The Census Bureau released its domestic immigration reports last week. The numbers do not include foreign immigration, which replenished the populations of states like California and New York. Hence, domestic migration is only one indicator tracking the flow of human capital. However, I would contend, it is a superior measure. Most foreign immigrants tend to settle in a handful of "gateway" states where existing communities of their nationality are already in place. An ethnic support system, not broader economic opportunity and quality of life, are the decisive factors. By contrast, domestic immigration reflects the behavior of people who, native born or foreign, have been residing in the U.S. and are acting upon more informed opinions about where they want to live.

 


Domestic Immigration, Outmigration
(by state, in 000s, 1995-2000)

 

Inflow

Out-

flow

Net

Gain

Rate

(1)

1   Nevada 466.1 232.2 233.9 151.5
2   Arizona 796.4 480.3 316.1 74.3
3   Georgia 965.6 624.9 340.7 48.6
4   North Carolina 919.3 581.5 337.8 48.4
5   Florida 1,860.7 1,253.7 607.0 44.0
6 Colorado 643.8 481.2 162.6 43.8
7 South Carolina 442.4 310.2 132.2 37.2
8 Idaho 182.9 149.1 33.8 29.6
9 Tennessee 568.0 421.7 146.3 28.7
10 New Hampshire 162.3 134.3 27.9 25.0
11   Delaware 101.5 84.1 17.4 24.9
12   Oregon 399.3 324.6 74.7 24.6
13   Arkansas 252.1 210.0 42.1 17.4
14   Washington 618.4 543.1 75.3 14.3
15   Utah 242.2 216.9 25.3 13.1
16   Virginia 821.7 746.0 75.7 11.9
17 Mississippi 226.8 199.9 26.9 10.4
18 Kentucky 318.6 284.5 34.1 9.2
19 Missouri 473.4 427.3 46.1 9.0
20 Texas 1,362.8 1,214.6 148.2 8.1
21   Minnesota 355.3 326.1 29.2 6.5
22   Alabama 326.2 300.0 25.8 6.3
23   Oklahoma 322.5 305.6 16.9 5.4
24   Vermont 69.7 67.5 2.3 4.0
25   Indiana 451.4 429.7 21.6 3.9
26 Rhode Island 97.0 93.7 3.2 3.4
27 Maine 108.0 104.4 3.6 3.1
28 Wisconsin 338.1 330.8 7.3 1.5
29 Kansas 276.8 284.6 -7.8 -3.2
30 Maryland 495.2 514.9 -19.7 -4.1
31   Montana 111.5 116.7 -5.2 -6.1
32   West Virginia 138.5 149.2 -10.7 -6.3
33   Massachusetts 446.8 501.6 -54.7 -9.4
34   Nebraska 154.0 169.4 -15.4 -9.7
35   Michigan 467.6 559.6 -91.9 -10.0
36 Ohio 588.6 705.6 -116.9 -11.0
37 Pennsylvania 668.8 800.0 -131.3 -11.4
38 Iowa 214.8 247.8 -33.0 -12.1
39 South Dakota 72.5 85.0 -12.5 -17.6
40 Louisiana 253.5 329.3 -75.8 -18.1
41   New Mexico 205.3 235.2 -29.5 -19.8
42   Connecticut 260.8 325.4 -64.6 -20.5
43   New Jersey 534.6 717.4 -182.8 -23.7
44   California 1,449.0 2,204.5 -755.5 -24.6
45   Wyoming 72.8 85.4 -12.5 -26.6
46 Illinois 665.1 1,007.7 -342.6 -29.7
46 North Dakota 60.3 85.5 -25.2 -40.6
48 New York 726.5 1,600.7 -874.3 -48.8
49 Alaska 95.6 126.0 -30.5 -51.0
50 Hawaii 125.2 201.3 -76.1 -65.4
51   D.C. 113.0 158.4 -45.3 -81.7

Source: U.S. Census

(1) Migration rates: the number of people who left between 1995 and 2000 expressed as a proportion of the 1995 population.


 

When analyzing domestic migration numbers, it is helpful to distinguish between people who are actively participating in the workforce, or who will when they become old enough to do so, and those who have retired from it. The Census thoughtfully calculates separate numbers for people aged 65 and older. By deducting these from the domestic migration flows, we obtain a number for whom we might call "economically productive" citizens.

 

Interestingly, the state rankings do not change significantly. Most elderly people tend to retire in the same communities where they spent most of their lives; those who leave tend to go to the same places that younger people go. Remarkably, even when retirees are excluded, Florida remains the top destination in the U.S.

 


Domestic Immigration, Outmigration

(Under 65, by state, in 000s, 1995-2000)

 

Total

Inflow

Over 65

Inflow

Under 65

Inflow

1   Florida 607.0 149.4 457.6
2   Georgia 340.7 13.9 326.8
3   North Carolina 337.8 20.9 316.9
4   Arizona 316.1 53.2 262.9
5   Nevada 233.9 22.2 211.7
6 Colorado 162.6 2.0 160.6
7 Tennessee 146.3 10.5 135.8
8 Texas 148.2 18.0 130.2
9   South Carolina 132.2 15.8 116.6
10 Washington 75.3 1.2 74.1
11 Oregon 74.7 1.3 73.4
12   Virginia 75.7 6.9 68.8
13   Missouri 46.1 0.5 45.6
14   Arkansas 42.1 2.5 39.6
15   Kentucky 34.1 -1.4 35.5
16 Minnesota 29.2 -6.0 35.2
17 Idaho 33.8 2.8 31.0
18 Indiana 21.6 -6.3 27.9
19 New Hampshire 27.9 0.7 27.2
20 Mississippi 26.9 2.4 24.5
21   Utah 25.3 2.1 23.2
22   Alabama 25.8 3.0 22.8
23   Oklahoma 16.9 1.1 15.8
24   Delaware 17.4 2.7 14.7
25   Wisconsin 7.3 -4.0 11.3
26 Rhode Island 3.2 -0.1 3.3
27 Vermont 2.3

-   

2.3
28 Maine 3.6 1.7 1.9
29 Montana -5.2 0.9 -6.1
30 Kansas -7.8 -0.4 -7.4
31   West Virginia -10.7 -0.9 -9.8
32   South Dakota -12.5 -0.2 -12.3
33   Wyoming -12.5

-   

-12.5
34   Nebraska -15.4 -1.9 -13.5
35   Maryland -19.7 -4.4 -15.3
36 North Dakota -25.2 -1.5 -23.7
37 Iowa -33.0 -4.9 -28.1
38 Alaska -30.5 -1.4 -29.1
39 New Mexico -29.5 2.5 -32.0
40 D.C. -45.3 -5.2 -40.1
41   Massachusetts -54.7 -14.4 -40.3
42   Connecticut -64.6 -9.5 -55.1
43   Michigan -91.9 -22.0 -69.9
44   Louisiana -75.8 -2.5 -73.3
45   Hawaii -76.1 -1.0 -75.1
46 Ohio -116.9 -18.6 -98.3
46 Pennsylvania -131.3 -15.9 -115.4
48 New Jersey -182.8 -23.1 -159.7
49 Illinois -342.6 -43.1 -299.5
50 California -755.5 -34.2 -721.3
51   New York -874.3 -114.2 -760.1

Source: U.S. Census

Note: Negative numbers indicate an outflow of population.


 

The recently published Census report did not break down domestic migrants by occupations or income levels, but I would hypothesize that they tend to be better educated and more economically productive than stay-at-homes.

 

According to the Census, migration peaks in the 18 to 30 age range. There are several reasons to think that migrants within this cohort are better educated than their peers who stay put. First, the group includes a significant number of students who attend out-of-state college. Secondly, college-educated students enjoy greater financial resources to undertake the risk of an out-of-state move. And thirdly, college graduates are more likely to seek employment with corporations and that require them to relocate.

 

If I am correct, states suffering from out-migration are experiencing a very real "brain drain." Conversely, states gaining domestic migrants are accumulating human capital.

 

As noted in my last column ("Blundering in the Dark," July 28, 2003), neither Virginia nor any of its regions have articulated coherent strategies for recruiting and retaining their best and brightest. Virginia invests billions of dollars annually in K-12 and higher education without a clue as to where students go when they graduate or what their motives are or moving or staying. If Virginia is a net gainer from the migration of millions of American move from state to state, it is the result of pure happenstance, not public policy.

 

Even a casual perusal of the state-level data reveals some fascinating trends. Washington, D.C., for instance, suffered heavier losses than any of the 50 states, shedding 45,300 domestic residents in only five years. Remarkably, Washingtonians moved to Maryland over Virginia by a nearly three-to-one ratio (64,000 to 24,000).

 

But when Marylanders chose to bail from "the old line state," they didn't move to the district. No, they moved en masse to Virginia. Maryland, it turns out, was the biggest source of migrants to Virginia, supplying 79,200 new residents to the Old Dominion over the five-year period. Indeed, were it not for the influx of Marylanders, Virginia would have suffered a net loss in domestic migration!

 

Where did Virginians go when they decided to leave? South of the border. The hottest destination was North Carolina. More than 89,000 Virginian residents moved to the piney land of the Tarheels in the late 1990s. (That number does not account for the number of Carolinians who moved to Virginia -- the Census report did not provide that information -- but the migratory trend assuredly worked in North Carolina's favor.)

 

Other curiosities: Virginia was the seventh most popular destination for out-migrating New Yorkers. And, defying all the odds, the Commonwealth proved the fifth most common destinations for Hawaiians leaving their islands!

 

The Census Bureau's domestic migration data are indispensable for understanding one of the most critical forces underpinning the economic performance of Virginia and every one of its regions. The movements, flows and counter-currents of human capital deserves greater scrutiny than we Virginians have been willing, so far, to give them.

 

If any readers are working in this area, please contact me. In the meantime, I will drill deeper into the data to see what patterns emerge at the city and county level within the state. I'll be back in two weeks with a follow-up report. 

 

-- August 11, 2003

 

 

Bring Home the Bacon

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You can berate Bacon at jabacon@

baconsrebellion.com

 

Or read his profile here.

 

 

 

 

State-to-State Migration Flows: 1995 to 2000. A Census 2000 Special Report