Gone to Texas: Migration Vital to Growth in the Lone Star State Pia Orrenius Federal Reserve Bank of Dallas June 27, 2018
Roadmap History/Trends in migration to Texas Role in economic growth Domestic migration International migration Characteristics of migrants Migrants in the labor market Outlook: Role of demographics
History of migration to Texas For most of its history, Texas has attracted settlers from the rest of the nation rather than abroad Immigrants did not begin to settle in Texas until late 1970s and 1980s Texas immigrant share of the population didn t surpass that of nation until late 1980s Before the 1980s oil bust State economy was cotton, cattle and oil Migration was largely low-skilled Bust provided impetus for the diversification of Texas economy Enter age of rising high-skilled migration
Index 400 350 With migration, Texas employment can consistently grow faster than the U.S. 300 Texas 250 200 150 U.S. minus Texas 100 50 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 NOTES: Indexed to first quarter 1970 = 100. Underlying series are seasonally adjusted. Partial fourth quarter 2017 based on Oct. Nov. SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; authors' calculations.
Most recent decade saw an unexpected surge in migration to Texas Net migration to Texas (thousands) 350 300 250 Domestic International Hurricane Katrina 200 150 100 50 0 '91 '92 '93 '94 '95 '96 '97 '98 '99 '01 '02 '03 '04 '05 '06 '07 '08 '09 '11 '12 '13 '14 '15 '16 '17 NOTES: Census Bureau population estimates approximate the population on July 1 of the year indicated and, thus, capture changes from the previous year. Data not available for decennial census years, 2000 and 2010. SOURCE: U.S. Census Bureau.
Broad-based job growth in Texas post-recession recovery Percent 20 18 16 14 12 10 8 6 4 2 0 Job Growth by Wage Quartile, 2010 2015 Texas U.S. Minus Texas 18 10 11 12 9 10 8 6 Lowest Wage Quartile Lower Middle Wage Quartile Upper Middle Wage Quartile Highest Wage Quartile NOTES: Calculations include workers over age 15 with positive wages and exclude the self employed. Quartiles based on the Texas and US wage distributions from the 2011 ACS, which refers to 2010 wages. SOURCES: 2011 ACS; 2016 ACS.
Domestic Migration
Among most-populous states, domestic migration additive in only Texas, Florida Cumulative Net Domestic Migration by State as Percent of 2010 Population Less than 1.9 percent 1.9 to 1.1 percent 1.1 to 0 percent 0 to 3.5 percent Above 3.5 percent NOTE: Chart labels show accumulated net domestic migration from July 2010 to July 2017 as a percent of population in 2010. SOURCE: Census Bureau.
Domestic migrants to Texas come from variety of states Cumulative Gross Domestic Migration to Texas by Sending State California 371,730 Florida 197,674 Other 1,560,064 Oklahoma 163,029 Louisiana 162,463 Colorado 118,957 Georgia 115,079 New York 134,862 Illinois 134,160 Virginia 102,604 Arizona NOTE: Pie slice labels show total number of movers from sending state to Texas from 2011 through 2016. 114,219 SOURCE: American Community Survey, 2011 16.
Reason for migrating to Texas versus elsewhere Reason (%) Texas Non-Texas Relocated for job 53 43 Family Reasons 24 27 Amenities 20 25 SOURCE: March CPS, 2011-2016
International Migration
International migration flows mostly to populous coastal states Cumulative Net International Migration by State as Percent of 2010 Population 0.2 to 1.0 percent 1.0 to 1.2 percent 1.2 to 1.5 percent 1.5 to 2.6 percent Above 2.6 percent NOTE: Chart labels show accumulated net international migration from July 2010 through July 2017 as a percent of population in 2010. SOURCE: Census Bureau.
Mexico accounts for over a quarter of international migration to Texas, low numbers by historical standards Cumulative Gross International Migration to Texas by Country of Origin Other 567,459 Mexico 320,808 India 100,985 Korea 37,218 Northern Triangle China 85,409 Germany 54,808 39,004 NOTES: Pie slice labels show total number of movers from sending region to Texas from 2011 through 2016. Northern Triangle is El Salvador, Guatemala and Honduras. SOURCE: American Community Survey, 2011 16.
Texas interior metros become global destinations Percent Foreign-Born Population Share by Metro 30 25 Houston El Paso 25.1 23.5 20 15 10 Dallas Ft. Worth 18.2 Austin 14.4 San Antonio 12.2 5 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 NOTES: Depicts foreign born population share. Geographic scope of metros has changed over time, most recently in 2013. SOURCES: 1970 2000 Census; 2010 through 2016 American Community Survey 1 year estimates.
Characteristics of Migrants
Domestic migrants What do they bring? Characteristics of Texas migrants Significantly more likely to be college-educated Otherwise similar to natives in Texas Immigrants Likely to live in urban areas and much more likely than natives to be in their prime working years Concentrated at the top and especially the bottom of the education distribution and in certain occupations Higher employment rates than natives and than immigrants in the rest of the nation
Brain Gain: New arrivals a key source of skilled workers for Texas Percent 35 Educational Attainment of Recent Migrants Texas population Domestic migrants International migrants 30 29 29 25 23 25 25 25 20 18 20 18 16 18 16 17 15 10 10 9 5 0 Less than high school graduate High school graduate Some college Bachelor's degree Graduate or professional degree NOTE: Calculations include individuals ages 25 and over who moved to the state during the 12 months prior to being surveyed. SOURCE: American Community Survey, 2011 16.
Domestic migrants' educational attainment by sending state Sending state New York Illinois Georgia Colorado California Arizona Florida Oklahoma New Mexico Louisiana Percent Less than high school High school Some college Bachelor's degree Graduate or professional degree 0 10 20 30 40 50 60 70 80 90 100 NOTES: Chart shows education levels of migrants age 25 or older who moved in the past year from each state to Texas. Included are the top 10 states by total population over 25 that moved to Texas in the past year. SOURCE: American Community Survey, 2011 16.
International migrants' educational attainment by country of birth Less than high school High school Some college Bachelor's degree Graduate or professional degree Sending country India China Korea Canada Japan Germany Cuba Mexico El Salvador Honduras Percent 0 10 20 30 40 50 60 70 80 90 100 NOTES: Chart shows education levels of immigrants age 25 or older who moved in the past year from each country to Texas. Included are the top 10 countries by total population over 25 that moved to Texas in the past year. SOURCE: American Community Survey, 2011 16.
Migrants in the Labor Market
Economic effects of migration on destination Migration increases the labor force Increasingly important in light of aging trend Native population benefits through lower prices of migrantproduced goods and services, higher returns on capital and land Increased specialization leads to higher productivity Texas migrants success does not appear to have come at natives expense Migration endogenous to growth, relieves bottlenecks and accompanied by capital inflows
Immigrants tend to be of working age Age Profile of Immigrants vs. Natives in Texas Age Over 80 75 to 79 70 to 74 65 to 69 60 to 64 55 to 59 50 to 54 45 to 49 40 to 44 35 to 39 30 to 34 25 to 29 20 to 24 15 to 19 10 to 14 5 to 9 Under 4 10 5 0 5 10 SOURCE: 2014 16 American Community Survey three year estimates. 15 Natives Immigrants Percent
Educational attainment of immigrants and natives inside and outside Texas Percent 45 40 35 30 25 20 15 10 5 0 40.7 28.0 Less than high school 22.7 20.7 High school Immigrants 19.2 15.2 Some college 17.3 13.6 Bachelor's degree Texas Rest of U.S. 12.8 9.8 Graduate/ professional degree NOTE: Calculations include individuals age 25 or older. SOURCE: 2014-16 American Community Survey three-year estimates. Percent 45 40 35 30 25 20 15 10 5 0 10.7 9.3 Less than high school 28.6 26.5 High school Natives 33.0 31.0 Some college 20.119.4 Bachelor's degree 11.6 9.8 Graduate/ professional degree
High-skilled immigrants fill STEM, health sector jobs Medical scientists Computer software developers Physical scientists Electrical engineer Mathematicians Chemists Petroleum, mining, geological engineers Physicians Physicists and astronomers Metallurgical and materials engineers Comp. analysts and scientists High school and college instructors Dentists Mechanical engineers Pharmacists Chief executives and public Actors, directors, producers Athletes, sports instructors, and officials Lawyers Veterinarians Percent Foreign born as a percentage of labor force with college education or higher (16.6%) 0 10 20 30 40 50 NOTE: Among U.S. workers age 25 and over with bachelor's degree or higher, within an occupation, percentage who are foreign born. SOURCE: 2014-2016 American Community Survey.
Low-skilled immigrants concentrated in construction, ag, and food/cleaning/domestic service jobs Construction & extraction helpers Non farm agriculture Construction, ex. Supervisors Private household occupations Machine operators Fabricators; hand working Food prep and service Cleaning & building services, ex. household Personal services Freight handlers Vehicle mechanics Motor vehicle operators Sales, retail, & personal services Exec., admin. & managerial Health services Percent 43.9 42.2 37.6 52.9 77.9 76.4 75.9 74.6 72.6 70.6 70.0 67.0 66.5 61.7 58.3 Foreign born as a percentage of Texas labor force with less than high school education 0 20 40 60 80 100 NOTES: Percentage foreign born among Texas workers ages 25 and older with less than high school education in each occupation category. Selected categories of occupations are the top 15 by number of immigrant workers. SOURCE: 2014 16 American Community Survey three year estimates.
Table 1: Labor Market Outcomes of Immigrants and Natives in Texas, U.S. Texas Rest of U.S. Immigrants U.S. natives Immigrants U.S. natives Labor force participation (%) Less than high school credential 61.3 42.2 58.1 35.4 High school credential 67.3 59.4 65.5 56.0 Some college 75.9 65.9 69.8 65.2 Bachelor s degree 70.9 74.3 70.2 74.0 Graduate/professional degree 77.5 79.3 77.6 74.0 All groups 67.9 65.5 67.1 63.5 Unemployment rate (%) Less than high school credential 2.4 7.4 5.1 8.5 High school credential 2.9 5.3 4.0 4.8 Some college 2.5 3.7 3.8 3.9 Bachelor s degree 2.0 2.6 3.5 2.3 Graduate/professional degree 2.5 1.9 2.7 1.9 All groups 2.5 3.8 3.9 3.6 Median real weekly earnings Less than high school credential $484 $484 $480 $486 High school credential $576 $701 $582 $677 Some college $641 $728 $679 $742 Bachelor s degree $1,013 $1,109 $1,063 $1,114 Graduate/professional degree $1,402 $1,286 $1,519 $1,367 All groups $608 $885 $700 $865 All groups (including ages 16 24) $605 $775 $675 $770 NOTES: All data refer to January October 2017. Median weekly earnings are deflated to October 2017 and are conditional on being employed, over age 24, with positive earnings. SOURCE: Current Population Survey (CPS) Merged Outgoing Rotation Groups.
Outlook for Growth and Migration
Lessons from decades of migration to Texas Texas economy has inherent strengths, such as natural resources, that set it apart Growth premium only possible with migration People relocate to Texas for jobs, but also amenities such as low cost of living, taxes; firms move here for business climate Migration has become much more domestic, increasingly high-skilled Shortages emerging in low- and mid-skilled sectors How likely are massive inflows to continue? Policy considerations must include investing in education
Demography is Destiny? Without Migration, Working-Age Population Projected to Stagnate Index, 1985 = 100 260 2015 35 projection 1.8 percent growth 240 220 200 180 160 140 120 Texas U.S. Without immigration or domestic migration 2015 2035 projection 0.3 percent growth Without immigration 0.2 percent growth 100 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 NOTES: Chart refers to growth in working age (25 64) population. Growth rates are annualized. SOURCES: Census Bureau; Texas Demographic Center; Pew Research; adjustments by Federal Reserve Bank of Dallas.
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