If you want to understand why people leave a state, follow the jobs and wages, not the political chatter.
The latest census estimates show that the United States added 1.8 million people from 2024 to 2025, marking the slowest population growth since COVID. The slowdown has been driven largely by a historic decline in international migration. That national headline obscures the more consequential story: States are still gaining or losing people for different reasons.
In a lower-growth era, the states that keep attracting residents will be the ones that consistently produce what movers are actually looking for: rising incomes, expanding job opportunities and communities that feel as if they’re growing, not stagnating.
It’s tempting to explain domestic migration with a grab bag of cultural narratives: politics, climate or flashy incentive programs. Sometimes, those things matter at the margins. However, research on interstate migration points to a simpler, more durable pattern: People go where they expect opportunity to be stronger.
A new working paper examines what draws Americans across state lines and finds that income growth, job creation and broader economic momentum do most of the work in predicting where people move. The implication is straightforward: States don’t “win” migrants with slogans. They win by building conditions that produce better paychecks, more openings and a sense that life is getting easier, not harder.
This is where state policy matters not as branding, but as infrastructure for growth.
One way economists describe those policy conditions is economic freedom: how much a state’s rules and tax structure leave room for working, hiring, investing and expanding. In practice, that includes tax burdens, labor-market flexibility and the size of government’s footprint in the economy.
Critics often hear “economic freedom” and assume it’s ideological. The research points to something more practical: Freedom matters mainly because it helps generate the outcomes movers care about. When you account for income and job growth, the “direct” pull of freedom itself shrinks. Freedom works in the background, shaping whether opportunity shows up in pay, jobs and long-term growth.
The findings also reveal an important asymmetry: These policies tend to appear more clearly in what attracts newcomers than in what immediately pushes current residents out. People rarely leave overnight because a state is “too regulated.” They leave gradually as opportunity erodes; when wages lag, job growth slows and the future feels narrower.
California is a telling example. Census estimates show the state lost a large number of residents to domestic migration in 2024 and 2025. In 2024, international migration was large enough to offset those losses. When international migration fell in 2025, California posted a small net population decline.
Texas offers a useful contrast, not because it’s perfect but because it illustrates how structural differences compound over time. Texas has no state individual income tax and instead relies on a gross-receipts business tax rather than a traditional corporate income tax. California, by contrast, has a top marginal state income tax rate of 13.3 percent (with additional payroll-tax layers on wage income) and a corporate income tax rate of 8.84 percent.
Those choices don’t just show up on tax forms. They shape investment, hiring and take-home pay, the fundamentals that migration research says matter most.
Yet, when states see people and businesses leaving, policymakers often reach for the fastest, most visible tools: relocation bonuses, targeted credits or headline-grabbing incentive packages. These can make for good press releases. They rarely change the underlying calculus for a family deciding whether moving is worth the disruption.
If states want durable population growth in a low-mobility era, the agenda is less flashy and more effective: make it easier to start and expand businesses, keep more of what you earn and enter the workforce without unnecessary barriers. Prioritize public spending that supports growth rather than crowding out the private sector that creates it.
As national growth slows, it becomes harder to retain the people you have and attract the ones you want. Families and workers do not uproot their lives on a whim. They move when the fundamentals point up: income growth, job opportunity and a community that feels like it is moving forward.
States that strengthen those fundamentals will continue to attract people even as the country’s growth rate cools. States that don’t will continue to drift, not because Americans are chasing freedom as an abstract ideal, but because opportunity has quietly moved elsewhere.
Tiange (Sheryl) Du is a research specialist at the Shelia and Robert Challey Institute for Global Growth and Innovation at North Dakota State University. She wrote this for InsideSources.com.
