Drivers of Interstate-migration: Implications for Maine Policymakers

THERE’S been a lot of discussion in Maine regarding projections of the state’s slowing and declining growth for the population and labor force.  While policymakers continue to focus on addressing these issues, recent research from the Center on Budget Policy and Priorities offers some insight on the reasons for interstate migration.  Reviewing Census and IRS data, as well as academic research on the drives of interstate migration, the CBPP’s made the following findings (the below is not a comprehensive list):

  • Relatively few Americans relocate from state to state, and a miniscule share of them report that they moved because of taxes;
  • People who do move are nearly as likely to move from low-tax states to high-tax states as in the other direction — in some cases, more likely;
  • Primarily low- and moderate-income households, not high-income households, are migrating to states without income taxes;
  • Climate is a major driver of interstate migration; people — especially retirees —
    continue to move from cold, snowy states to Sunbelt states regardless of the tax levels in either the origin or destination state; and
  • The vast majority of academic research using sophisticated statistical techniques concludes that differences in state tax systems and levels do not have a significant impact on interstate migration.

The CBPP study found that the top two reasons for interstate migration were jobs and family reasons:

Demographers and economists have been using sophisticated statistical techniques for decades in order to understand the reasons people move from state to state. These studies generally reach conclusions about people’s reasons for moving by examining the objective characteristics of the movers themselves — age, education, family composition, and income levels, for example — and of the origin and destination locations (unemployment rates, wage levels, and housing costs).  A general consensus has emerged from this research that most short-distance moves are motivated by a desire for better housing (cheaper, higher quality, closer to work, transition from renter to owner, location in a preferred neighborhood), while long-distance moves are more likely to be job-related as people are laid-off, transferred or simply decide to look for a higher-paying job elsewhere. A 2009 study, for example, found that interstate differences in unemployment rates and income levels had roughly twice as great an impact on interstate migration as interstate differences in housing affordability.

Survey data that have become available in recent years generally confirm the findings of statistical research on migration. Each year since 1998, the federal government has surveyed people who move, asking them the main reason they moved. The two most common reasons cited for an interstate move in the most recent survey were “new job or job transfer” and “other family reason.” These reasons were offered by 32 percent and 23 percent of interstate movers, respectively — or 55 percent in total.

Given the still weak Maine labor market, highlighted by still low metrics for prime age workers (25 to 54 year olds), it would seem, against the backdrop of the CBPP findings, that boosting economic and job/wage growth to address the short-run problems of the current labor market would also address any long-run concerns regarding the shifting in Maine’s demographics.

John Haskell

About John Haskell

John graduated from the University of Southern Maine with a degree in Political Science, and from the University of Maine School of Law. He has worked in both the public and private sectors, and currently, works with a small business services company in the Mid-Coast area.