Economists have long studied migration between the states because migration is the ultimate expression of “voting with your feet.” In other words, more people moving into a state is a good sign of social and economic progress, whereas more people leaving a state is not a good sign. Therefore, a thorough understanding of Oklahoma’s migration patterns is essential to understanding progress on much larger public policy issues.

This month and next month in these pages we will explore Oklahoma’s migration patterns. The most comprehensive data available on domestic migration come from the U.S. Department of Commerce’s Census Bureau (census.gov/popest/data/datasets.html). Chart 1 shows that between 1991 and 2012 109,215 more people were moving to Oklahoma than leaving. Oklahoma migration has gone through three distinct episodes during this time span.

1. The first episode was between 1991 and 1999 when Oklahoma had net in-migration in every year, gaining a total of 45,881 residents from other states—an average of 5,098 people per year.
2. The second episode was between 2000 and 2004 when Oklahoma’s in-migration suddenly reversed to out-migration, with the sole exception of 2002. Oklahoma lost 16,628 residents—an average of 3,326 people per year.
3. The third episode began in 2005 and continues to 2012 (the latest data available) when Oklahoma’s out-migration suddenly switched again to in-migration. However, unlike the first episode, the level of in-migration has been much higher. In eight years 79,961 more people moved into Oklahoma than moved out—an average of 9,995 people per year. This episode is especially intriguing since it occurred after the enactment of Right to Work in 2001 and a series of substantial income tax cuts from 2004 to 2009.

However, while the Census Bureau data are comprehensive, they are also very shallow. Fortunately, the Internal Revenue Service (IRS) provides an annual snapshot of taxpayer migration via tax returns, which provides for a much richer picture of migrants—although the data are not as recent (irs.gov/uac/SOI-Tax-Stats-Migration-Data). Of course the IRS has actual tax returns (a good proxy for the number of households), so it knows the number of exemptions (a good proxy for the number of people in the household), and filers’ reported Adjusted Gross Income (AGI, a good proxy of household income).

Table 1 shows migration data from the IRS for Oklahoma between 1995 and 2009 and reveals a more complex picture. The IRS data generally show the same in-migration pattern as the Census Bureau data, with a net 50,315 people moving into Oklahoma over this time period. Interestingly, the recent surge in net migration was mostly fueled by a higher number of in-migrants, jumping from 77,028 in 2004 to 84,274 in 2005. Oklahoma seems to have become more attractive to out-of-state people.

However, despite the influx of people, income has been flowing out of Oklahoma—including during a few years when more people moved in than moved out—suggesting that out-migrants had higher-than-average incomes than in-migrants. Between 1995 and 2009, at least $831,553,000 (not adjusted for inflation) left the state. This out-flow has mitigated somewhat since 2005, with $480,854,000 more income coming into the state, which also coincides with the overall surge of in-migrants.

Had this income stayed in Oklahoma, state and local governments would have collected an estimated $147,903,000 (not adjusted for inflation) in higher taxes between 1995 and 2009. This not only includes higher income taxes, but also higher sales taxes and property taxes. However, since 2005, the in-flow of income into the state has added $92,889,000 to state and local government coffers.

How can policymakers influence migration? Next month we’ll explore why people are coming to Oklahoma and from where they are coming. Was Oklahoma’s recent surge in net in-migration influenced by key policy changes such as Right to Work and income tax cuts? Keeping this net in-flow of people (and income) will add another positive and dynamic element to Oklahoma’s economy.