No Evidence of a California Exodus, UC Study Finds
Wednesday, July 14, 2021
Despite California losing a congressional seat for the first time in history due to slow population growth and some high-profile technology companies and billionaires leaving the state, there is no evidence of an abnormal increase in residents planning to move out of the state, according to a University of California survey released July 7.
The research, which included UCLA, is part of a larger, multi-institution research consortium led by UC to assess whether there is in fact a “California exodus,” and to help inform state policy and public knowledge by focusing on state population patterns.
Formed in fall 2020, the project includes studies conducted by scholars at UCLA, UCSD, UC Berkeley, Stanford and Cornell University. The research draws on public opinion data, the U.S. Census, consumer credit histories, home ownership rates, venture capital investments and information from the Franchise Tax Board.
“From housing affordability to post-pandemic recovery, California is faced with solving a daunting number of existential challenges,” UC Regent John Perez said. “Sliced and diced by geography, race, income and other demographic factors, our efforts have produced a clearer picture of who perceives California as the Golden State versus a failed state.
“The empirical data will be, at once, disappointing to those who want to write California’s obituary, as well as a call to action for policymakers to address the challenges that have caused some to lose faith in the California Dream,” he continued.
The UCLA study found the number of those moving out of California to other states has trended up since 2012, but is similar to levels last seen in the mid-2000s.
The UCLA research also shows Americans between the ages of 25-39 are moving at roughly double that of middle-age or older people. While moving into California remains elevated for younger people through 2019, the combination of some decline coupled with those moving out of state has driven down the number of younger people moving into California overall.
The number of Americans aged 60 and older moving into California has fallen since 2014, while more elderly Californians are moving out of state. The number of younger and older residents moving out of California has also trended up since 2014.
Among U.S. destinations, Texas and Washington were at the top of the list among younger people, whereas low-cost and proximate areas of Nevada and Arizona dominated destinations among older Californians.
Fewer than 5% of foreign-born immigrants who arrived in the United States during the prior two years left California.
UCSD recently conducted a survey that found the percentage of Californians who plan to leave the state has remained static over the past two years: 23% percent of California’s voters reported that they were seriously considering leaving the state, compared to 24% found in a 2019 survey conducted by UC Berkeley.
The UCSD survey of more than 3,000 respondents also found:
- By nearly a 2-to-1 margin, Californians said they still believe in the “California Dream” — that it’s a great place to live and raise a family. Spanish speakers, Latinos, African Americans, Asian Americans and younger Californians are more optimistic, while middle-class Californians, white respondents, older residents and Republicans are more pessimistic.
- Those living in parts of the state that have not been part of recent economic expansions are most likely to contemplate moving.
- Middle-class Californians making incomes between $50,000 and $100,000 are the most concerned about the state of California today as well as its future.
- There is a gap between the percentage of Democrats — 21% — and Republicans — 30% — seriously considering moving.
- Asked to look ahead 10 years, 35% of respondents believe it would be better if the population decreases significantly and 46% want it to stay about the same. Only 19% of those surveyed said that the state would be better if its population increases.
The survey also revealed an 8% decrease in the percentage of Californians who called the state one of the best places to live, down from 50% in the 2019 poll to 42% in the 2021 UCSD poll.
The poll found that affluent Californians are the group most satisfied with the direction of the state and very likely to believe that it will be a better place when today’s children grow up. The analysis of nearly two decades of Franchise Tax Board data demonstrated no flight of millionaires away from California despite multiple tax increases levied on higher earners in recent years.
“Despite the popular notion of unhappy Californians leaving the state en masse, our robust research shows there is actually no exodus,” said Thad Kousser, chair of the political science department at UCSD and the lead researcher of the most recent survey.
“Policymakers, including those trying to prevent an exodus, should focus more on those who are not as optimistic about the state’s direction, including many in the middle class facing steep housing costs and people from areas of the state facing the greatest economic challenges,” Kousser continued.
Using 16 years of credit history to track residential moves through the end of 2020, a UC California Policy Lab report found “no evidence of a pronounced exodus from the state” and “little evidence that wealthy Californians are leaving en masse” because of the coronavirus pandemic. The report did reveal net migration away from San Francisco during the pandemic along with a decline in the number of people moving to the state.
It also found there is no evidence that wealthy households are leaving the state in large numbers, around two-thirds of people who moved out of San Francisco remained within the 11-county Bay Area economic region, while 80% remained in California, which is consistent with trends in prior years.
Lastly, the UC-led project features analysis from Cornell University sociology professor Cristobal Young on which states are getting the most venture capital investment.
California’s share of venture capital dollars rose from one-third in 1995 to more than half throughout the 2010s. In the first quarter of 2021, the state’s share of VC funding stood at 48%, slightly below trend but consistent with normal year-to-year fluctuations.
Category: Business News, California, Economic News