Before the holidays, CF publicized the historic decline in Pennsylvania’s population. The state was one of only eight to see an absolute decline in its number of residents. Domestic migration—or the movement of people between states—drove this decline.
In a post early last year, we documented the population trends in twenty states. The ten states that experienced the greatest growth via domestic migration (“destination states”) had a lower average tax burden than the states that experienced the greatest declines (“deserted states”). After adding another year of population figures to the data set, the pattern remains the same.
The table below shows people fleeing high tax states and moving to low tax states.
The destination states imposed an average tax burden of 8.84 percent on residents, according to data from the Tax Foundation. The deserted states imposed an average tax burden of 11 percent—more than two percentage points above the destination states’ collective tax burden.
Of course, taxes aren’t the only obstacle government throws in the way of economic opportunity. It also imposes a variety of unnecessary regulations (licensure laws, compulsory unionism, etc.) on workers trying to pursue a decent living. Together, these restrictions affect the economic freedom of a state—a concept measured by the Fraser Institute in their annual Economic Freedom of North America report.
The report assigned an economic freedom score to each of the fifty states, some of which are included in the table above. As the table indicates, the destination states have a higher average economic freedom score than the deserted states. People want, and are willing to pursue, a better quality of life. And since economic freedom is tied to improvements in the quality of life, it makes sense for people to move to freer states.
If policymakers want to avoid the consequences of the coming demographic changes, they need to give people a reason to live and work in Pennsylvania. Adopting the recommendations in our new policy brief, Embracing Innovation in State Government, is a great start on the road to making Pennsylvania a destination state once again.