Californian Depopulation

Is Tiebout competition draining people out of California? That theory suggests that people vote with their feet, but its existence in the real world has been questioned.  This study from the Manhattan Institute makes for some compelling reading about that real world during the last ten or fifteen years.

 

Foreign migration remained a net positive for California, in every sense of the word. However, this trend masked the out-migration of domestic residents to other U.S. states, which looks like it averaged 200,000 people a year for the last 20 years.

2 responses to “Californian Depopulation

  1. I think the problem with the Tiebout competition hypothesis here is why is CA enjoying net foreign migration? A foreigner coming to the US has the least ties to any one particular area. Why go to California when other states are supposedly more friendly to business with their lower regulations and taxes…say like North Dakota?

    For established residents, ‘voting with your feet’ carries a pretty high transaction cost. Someone who is established has probably achieved advantages in knowing the areas culture, regulations, markets and so on. In order to uproot onesself to go find lower taxes or less regulation elsewhere, the differential between the two places has to be very large. A more rational explanation would be that such migration is due to non-Tiebout competition (such as the desire to retire from working thereby making it unnecessary to be near a center of commerce).

  2. The alarming questions of this trend: What expectations do foriegn immigrants have of California’s social service system? What level of Federal help are the other 49 states willing to give as California continues this drain? How much wealth/capital is leaving California and assuming a zero sum which states are gaining this wealth?

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