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Blog Post · February 13, 2024

Where Are Californians Going When They Leave the Golden State?

photo - Open Road Through California Desert

California continues to lose residents to other states, as high housing costs and the flexibility of remote work have made other locations more attractive. The main beneficiaries have been neighboring states, though high income earners have also shown a modest preference for states without an income tax. But as the pandemic has receded and more workers have been asked to report to the office in person, these patterns have begun to slow or even reverse.

During the worst of the pandemic, neighboring states—Arizona, Idaho, Nevada, and Oregon—saw the highest rates of former California residents move in. (Net migration to Texas was also heavy, though not disproportionate to the state’s size.) The pattern is similar for 2022: Arizona, Idaho, and Nevada still received disproportionate net migration from California, according to recently released census data. (Most other states have flows too small to distinguish from zero.)

One notable reversal: California now has a net gain from Hawaii, which was a popular destination for remote workers during the pandemic but is now losing people to the Golden State.

The outmigration rate in 2022 is still highest to neighboring states

Neighboring states may be gaining the most migrants from California, but they have also featured some of the largest shifts back to California as the pandemic has faded. While California is still losing population to Idaho, Nevada, and Oregon, the net losses are smaller now—closer to pre-pandemic 2019 than pandemic-afflicted 2021. (Most other states have seen changes in their flows too small for statistical confidence.)

figure - Outflows have slowed the most to neighboring states

With the flexibility of working from home, higher-income Californians fled to states with cheaper costs—especially for housing—without necessarily giving up their California job and salary. They also showed some preference for states without an income tax when making their moves. A marked reversal of this pattern occurred in 2022—without much regard for tax rates. Relative to lower-income Californians, higher-income earners are still more likely to move to a state without an income tax, but the net outflow is far smaller than in 2021, and now resembles the early days of the pandemic.

Meanwhile, outmigration among lower- and middle-income Californians has not changed much for either income-tax or no-income-tax states. California’s highly progressive income tax does not affect these lower-income residents very much, while housing costs are as burdensome for them as ever.

figure - California has stemmed the loss of high-income earners, even to states without income taxes

Overall, the destination states for former Californians are broadly unchanged, though states that gained the most at the outflow’s peak have seen the largest reversions now that the worst of the pandemic is behind us. All the same, a reversion to even the pre-pandemic status quo still means lots of migration to states like Arizona, Nevada, Oregon, and Texas. And with the continuing flexibility of remote work and persistently high housing costs, high outmigration will likely be a part of California’s reality for the foreseeable future–with potentially far-reaching consequences for the state’s economic, social, and political makeup.

An earlier version of this post was published on April 13, 2023.


future of work Housing income Political Landscape Population remote work taxes