By Josh Lehner
Oregon Office of Economic Analysis Blog
Migration is vital to Oregon’s economic health. It is one of the two primary reasons Oregon outperforms the typical state during an economic expansion. The other being our industrial structure. In both good times and bad, Americans want to live in and move to Oregon. In fact, Americans have been moving to Oregon in droves since Lewis and Clark and are likely to continue to do so. Our state’s ability to attract skilled, young working age households is a huge economic benefit. We rank quite well on the brain gain spectrum (the opposite of the brain drain). There is a reason Mark’s research and presentation at last year’s Oregon Economic Forum was on the impact of migration, to both urban and rural Oregon. It is part of our economic foundation.
Yes, more migrants generally does result in stronger housing demand and yes, many of the migrants are from California, as we will discuss below. However, demand is just one component of housing costs. Thus, while there are certainly traces of truth in the underlying sentiment of the “No Californian” stickers — I also hear this at various presentations as well — the complaint, if not misguided, is certainly incomplete with a strong tinge of migration hypocrisy.
Focusing on just native born Americans, across the whole country 68% of the population lives in the same state they were born. Individuals living in Oregon today? Just 51% were born here. That’s a massive difference and mathematically works out to more than half a million “extra” migrants today in Oregon (582,300) than in typical state. In the map below, shown previously, orange and red counties have an above average share of migrants while green counties have few migrants.
As our office has been highlighting in the past couple of years, and we have an additional section in our latest forecast document, migration is picking up again. 2015 is shaping up to be as large of a year as the state saw during the housing boom. And yes, a sizable portion do come from California. Why do they come? Beyond a high quality of life, or high quality of place, migration is usually driven, economically speaking, by job opportunities and relative home prices. Where can one find a job and where can one find an affordable place to live, at least relatively speaking? Despite the rhetoric out there, Oregon when compared with our southern neighbor, ranks well along both of these lines in the past 25 years. Below are the graphs our office uses to illustrate this.
As relative job opportunities in Oregon are better (lower unemployment rate), migration is stronger and vice versus. Similarly, as home prices appreciate more quickly in California, migration into Oregon is stronger and vice versus. Note: relative home prices fit the data better over the housing bubble and Great Recession, however research has shown both to be statistically significant over time. Also the home price measure is a ratio of indexes, so a value of 1 means the indexes are the same, not that home prices are literally the same.
Where in California are many of these migrants coming from? Here it is a bit ironic that the online response has been coming from the Bay Area, since the majority of the migrants are coming from SoCal, at least last time our office dove into the county to county migration data from the IRS. Also this may be a bit different today with all the tech outposts in Portland in recent years.
Again, from an economic perspective, all of this migration into Oregon, both from California and elsewhere, is a positive development. It brings both skilled, young households who will set down roots (no, they are not all degree holding baristas) and a strong influx of retirees with a lifetime of experience and some wealth. These are good things and have been happening for the past 200 years. And for those who may prefer migrants not from California, the surrendered driver license data from the DMV shows the Californian share has been declining for the most part since the early 1990s.
For the record, while I am a transplant myself, I am not from California. I’m from the Great Plains and completed the Oregon Trail via the old route, wagon ruts and all.
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