In the zero-sum game of population migration, winners win and losers plan

The dynamics of population growth in the U.S. changed during the pandemic. As people migrated away to avoid the limitations of the pandemic, one region’s population loss was another region’s gain. Now, economists are analyzing the impact of migration on local economies.

In a Regional Policy Report for the Federal Reserve Bank of Cleveland, Stephan D. Whitaker analyzed how the pandemic impacted the population numbers in the Fourth Federal Reserve District. This district serves Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Whitaker notes, "Net domestic migration is a zero-sum game by definition. If some locations are winners, there must also be regions that lose out in this measure.” In the Fourth District, there were only two winners: Columbus and Lexington received more domestic migrants than they lost to other regions in the years before the pandemic.

Regions with negative domestic migration can still have growing populations if there is significant international migration or more births than deaths among the existing population. As it happens, the Fourth District does attract a substantial number of international migrants. Pittsburgh, Cincinnati, Dayton, Cleveland, and Akron are adding 1 to 2 international migrants per 1,000 residents annually. Unlike many other U.S. cities with significant numbers of international migrants, this influx is not negated by a considerable outflow of population.

Whitaker offered seven insights into how the Fourth District can grow its population over the next decade.

First, understand and develop high retention rates. Whitaker's analysis indicates that people stay in the Fourth District by choice rather than necessity. "They are finding good opportunities in their home regions, or they value being home more than the additional income they could earn somewhere else."

Second, benefit from the waves of retirements. The money retirees spend from outside sources, such as social security and health insurance, can help the local economy. Meanwhile, younger workers fill retirees' former jobs and spend additional wages within the local economy.

Third, understand and develop the advantage of home ownership. Whitaker found that people who move to Fourth District metro areas are likely to become homeowners.

Fourth, use public universities to circulate residents. Populations are dense around universities, and data suggests that this growth is coming at the expense of other district areas. States should bolster higher education institutions in other areas to spread workers and their wealth.

Fifth, improve the business climate. Policymakers must understand their region's starting point. Whitaker cites a study by Rickman and Wang that concluded, "There is no universal policy recommendation that can be given to all state and local governments. Cutting taxes and spending was found to stimulate growth in states that already had a high tax burden. Similar cuts in states without a high tax burden might have no effect or even a negative effect.”

Sixth, preserve and develop our built amenities. During the pandemic, migrants looked for amenities like arts and entertainment. Policymakers must maintain urban neighborhoods to support these amenities in metro areas.

Seventh, prepare for the dispersion of remote workers. To attract remote workers, the Fourth District must fortify high-speed internet and create easy transportation options for getting to a remote employer’s location.