Despite the myth of flight, there is no California exodus, UC research shows
BERKELEY, Calif. - Despite California losing a congressional seat for the first time because of slow population growth, the high price of living and some high-profile technology companies like Hewlett-Packard and Oracle leaving the state, there is no evidence of an abnormal increase in residents planning to move out of the state, according to the results of a new survey released this week by the University of California.
It's true, there are people moving away from California, but not at unusual rates, according to research conducted by scholars at UC Berkeley, UCLA, UC San Diego, as well as Cornell University and Stanford University.
And in fact, despite the hype of "millionaire flight," like when Tesla CEO Elon Musk moved from Palo Alto to Austin, Texas, California’s economy attracts as much venture capital as all other states combined, the data shows.
The researchers drew on public opinion data, the U.S. Census, consumer credit histories, home ownership rates, venture capital investments, and information from the Franchise Tax Board to make their determinations that there is no California exodus.
"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," said UC Regent John A. Pérez in a statement. "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."
Thad Kousser, chair of the political science department at UC San Diego and the lead researcher of the most recent survey, added: "Despite the popular notion of unhappy Californians leaving the state en masse, our robust research shows there is actually no exodus."
He said he hoped the research would encourage policymakers to focus more on the middle class struggling to afford housing and people facing the greatest economic challenges to make their lives better.
MORE: Silicon Valley exodus: Bay Area tech companies leaving for Texas
No big changes on residents’ plans to leave the state
UC San Diego recently conducted a survey that found the percentage of Californians who plan to leave the state has remained static over the past two years. Twenty-three percent of California’s voters reported that they were seriously considering leaving California, which is slightly lower than the 24 percent found in a 2019 survey conducted by UC Berkeley. This finding is consistent with research that UC San Diego did on Google search trends, which found no increase over the course of the pandemic in how frequently Californians searched terms such as "moving company" or "U-Haul."
Other findings in the UC San Diego survey of more than 3,000 respondents include:
- By nearly a 2-to-1 margin, Californians respond that they still believe in the "California Dream." 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, including the Central Valley and northern counties outside of the Bay Area, 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 surprisingly small gap between the percentage of Democrats (21 percent) and Republicans (30 percent) seriously considering moving.
- The survey also revealed an 8 percent decrease in the percentage of Californians who opined California is one of the best places to live, down from 50 percent in the 2019 UC Berkeley poll to 42 percent in the 2021 UC San Diego poll.
Claims of "millionaire flight" are unsupported by numerous data sets
The 2021 UC San Diego poll also 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. This aligns with research into migration patterns of California’s millionaires conducted by project partners at Stanford University and Cornell University. The analysis of nearly two decades of Franchise Tax Board data by Charles Varner and Cristobal Young demonstrated there has been no flight of millionaires away from California despite multiple tax increases levied on higher earners in recent years.
Younger Americans are more mobile, foreign-born immigrants stay
Researchers from UCLA found that the number of those moving out of California to other states has trended up since 2012, but that is not uncommon and is similar to levels last seen in the mid-2000s. During that period, those moving into California — both from other states and other countries — has seen few changes. Less than 5 percent of foreign-born immigrants who arrived in the U.S. during the prior two years left California. This finding suggests that California is not simply a gateway to other U.S. destinations among recent foreign-born immigrants arriving in the state.
Some migrating out of San Francisco but staying in state
Using 16 years of credit history data 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 pandemic.
The report did, however, reveal net migration away from San Francisco during the pandemic along with a decline in the number of people moving to the state.
For example, approximately two-thirds of people who moved out of San Francisco remained within the 11-county Bay Area economic region, and 80 percent remained in California which is consistent with trends in prior years.
Meanwhile, counties in the Sierra Nevada mountains and other parts of northern California saw huge increases in former Bay Area residents, with 50 percent and in some cases double that in 2020 as compared to 2019.
California draws half of all venture capital investments in the U.S.
Lastly, the UC-led project features analysis from Cornell University sociology professor Cristobal Young on which states are getting the most venture capital investment, and it demonstrates two major trends:
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 percent, slightly below trend but consistent with normal year-to-year fluctuations.