Economic Drivers & Impacts of Interstate Migration: California to Texas Exodus

This paper examines the economic determinants behind the recently observed migration flow from California to Texas. This paper is motivated by the recent rapid increase in migration from California to Texas—a trend that has sparked significant debate among politicians and media members and raised questions about the underlying economic factors driving this shift. While interstate migration has been broadly studied, few analyses have focused specifically on the recent California-to-Texas migration flow. By analyzing key economic indicators between 2010 and 2020—including outflow migration, unemployment, housing costs, crime rates, median household income, and labor participation—this study employs data on these factors in a two-way fixed effects regression model to uncover the factors that drive relocation decisions. Notably, the findings of the model suggest that median household income is a critical predictor, with higher income levels associated with a reduction in outflow migration, while other variables, such as housing costs and unemployment, exhibited limited statistical significance as predictors in the model. The results highlight the differences in economic environments in California and Texas in issues like housing affordability and income disparities. Limitations of the study include a relatively small dataset and potential model misspecification, suggesting the need for further research incorporating additional variables and possibly a more specialized model.