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Explainer · October 2023

What’s Behind California’s Recent Population Decline—and Why It Matters

Hans Johnson, Eric McGhee, Carolyn Subramaniam, and Vicki Hsieh

Supported with funding from the California Endowment and the David and Lucile Packard Foundation

Why is the country’s most populous state losing people?

In the last few years, California has entered uncharted demographic territory characterized by population declines. In a state long known for booming growth rates, this remarkable turnaround brings with it new questions about what a shrinking or slowly growing population might mean for the state’s future.

Explore our infographic for a visual overview of this explainer.

photo - Woman carrying boxes

California’s population has declined for the first time

During the COVID-19 pandemic, California lost population for the first time since gaining statehood in 1850. While the impact of the pandemic was abrupt, growth rates have been slowing since the start of the 21st century. This slower growth stands in sharp contrast with the previous century, which saw California’s population explode from under 2 million to 34 million.

Population change is determined by four factors: births, deaths, international immigration, and interstate migration. COVID led to a sobering death toll. It also led to increases in people moving out of state, while travel restrictions hindered international immigration. And birth rates continued to decline. Many of these shocks have dissipated as the state emerges from the pandemic, but there are signs that some might persist, leading to long-term demographic change.

More people are leaving California for other states

A significant driver of the state’s population loss has been residents moving to other states—most often Texas, Oregon, Nevada, and Arizona. Housing costs loom large in this dynamic. In a recent PPIC survey, about a third (34%) of Californians say they are considering moving out of the state due to housing costs.

Housing pressures disproportionately affect people with lower incomes and lower levels of educational attainment, though large racial differences in migration rates even within income groups suggest other factors such as family ties and social networks might also be at play. In addition, while the majority of domestic outmigrants are lower- and middle-income, an increasing proportion of higher-income Californians are also exiting the state. The “new normal” of remote work in many white-collar professions has enabled some higher-income workers to move. Politics might also play a role, as conservatives are much more likely than liberals to say they have considered leaving the state.

California’s birth rate is near record lows

Declining birth and fertility rates are a nationwide, even a global, phenomenon as economic and social events have changed the status of women and their access to educational and job opportunities. Total fertility rates—the number of births the average woman will have in her lifetime—have fallen across the US in recent decades. No state has a rate at or above 2.1, the level necessary to maintain a population’s current size (not taking immigration and migration into account), but California’s fertility rate has fallen faster than most. In 2008 its rate was above the national average (2.15); by 2020 it fell to the seventh-lowest (1.52).

The declining birth rate among young adults in their 20s is the biggest driver of the fertility rate decline. One major factor is that 20-somethings are now less likely to get married, which can affect decisions to have children. Two in three births in California are to married women, compared to 29 percent to women who have never married and 5 percent to women who are separated or divorced.

Immigration numbers are recovering from pandemic lows

The pandemic led to sharp drops in international immigration to the US and California. The net flow into California from July 2020 to July 2021 (44,000 immigrants) was the lowest in at least three decades. The number has since rebounded—nearly tripling to 126,000 from July 2021 to July 2022—but remains low by historical standards.

Most immigrants who came to California in 2010 or later are between the prime working ages of 25–54. Immigrants are thus major contributors to California’s economy, making up sizable portions of workers in the technology and health care sectors, as well as agriculture and hospitality. In the past, higher birth rates among immigrants also helped offset lower birth rates among US-born Californians, though more recently birth rates among immigrants have declined, reflecting patterns in sending countries.

California’s population is aging

In the short term, the pandemic led to a tragic increase in California’s mortality rate. Even though California had a lower COVID mortality rate than most states, deaths increased by over 50,000 in 2020 compared to 2019 (a 19% increase), and 2021 saw another increase of almost 10,000 more deaths than 2020. In the long term, declining birth rates, longer life expectancy, and the aging of the baby boomers all mean that California’s population is getting older, and deaths will likely rise as the population ages. Beginning around 2030, those 65 and older are projected to outnumber children in the state.

The aging of California’s population raises concerns about the size of the labor force, which is likely to shrink as many workers retire. In 2020, California had nearly four residents ages 18–64 for every adult 65 and older. This ratio is expected to drop to 2.8 by 2030 and 2.2 by 2060, if current trends continue.

An aging population has policy implications

Many counties across the state will experience an increase in older residents. This is significant because age shapes demand for key services, including health care, housing, and transportation.

Lower birth rates and declines in immigration may have significant effects on the future workforce—for example, there may be fewer health care personnel to care for the growing number of older Californians—and may also change demand for infrastructure and education. K–12 enrollment in California’s public schools has been declining for several years. Future declines could lead to school closures, but might permit more investment per child. There are also potential environmental gains from a lower or stabilized population level.

What’s next for California?

California’s population will continue to change as trends in births, deaths, international immigration, and interstate migration shift. July 2023 projections released by the Department of Finance suggest that the state population will plateau between 39 and 40 million residents in the long term. California lost a congressional seat for the first time after the 2020 Census; continued slow growth relative to other states could lead to more losses in the future.

While the future remains uncertain, it is unlikely that California will return to a period of rapid population growth. As the state enters this new demographic territory, promoting educational and economic success for all Californians will be a priority. Family-friendly policies like parental leave might elevate birth rates, although likely not enough to return the state to population-replacement levels. Improving housing affordability through residential construction will be crucial to stemming outmigration, especially among middle- and low-income households. At the end of the day, California’s challenge is to ensure that all residents can equitably enjoy the many advantages our state offers.