Study: No Mass Exodus in California; Most Moves Happened Within the State

News reports for the past few months have painted a dim view of California, suggesting a mass exodus was transpiring due to the pandemic. But in a recent research study released by the nonpartisan California Policy Lab — a data-driven insights organization working for the public good — most moves in 2020 happened within the state.

Another piece of good news that global mobility professionals should share with their talents: Northern California is opening ahead of southern California in a few weeks because of improved test numbers and vaccinations. People will see establishments such as restaurants and some museums finally open.

As for the study, it turned out that exits from California in 2020 largely mirrored historical patterns, while the biggest statewide change was a decrease in people moving into California. Using a new dataset of quarterly credit bureau data, the research team analyzed where Californians from each county moved after the pandemic struck in March 2020. 

“While a mass exodus from California clearly didn’t happen in 2020, the pandemic did change some historical patterns, for example, fewer people moved into the state to replace those who left,” explains author Natalie Holmes, a research fellow at the California Policy Lab and a graduate student at the Goldman School of Public Policy at UC Berkeley. “At the county level, however, San Francisco is experiencing a unique and dramatic exodus, which is causing 50% or 100% increases in Bay Area in-migration for some counties in the Sierras.”

“Some folks seem to be worried about the tax implications of wealthy individuals leaving the state, but we don’t yet see any dramatic evidence that rich households are fleeing California en masse,” comments Evan White, executive director of the California Policy Lab at UC Berkeley. 

“Unfortunately, because the state relies heavily on income taxes on the uber-wealthy, the departure of even small numbers of wealthy people could negatively impact revenues if they aren’t replaced with new entrants.”

The city had 35,900 people leave during the last three months of 2020, a jump of 61% from the prior year. About 15,000 new residents moved into San Francisco, a drop of 25 percent.

Both Santa Clara (38,400 people) and Alameda (37,400 people) counties saw 20% jumps in people leaving during the final three months of 2020, according to Berkeley researchers. Newcomers did not make up the difference.

But Marin and Contra Costa counties saw more people coming into their communities at the end of 2020 than during the same period of 2019.

California Corporate Housing serves many of these areas. 

This is the first published analysis using a new dataset of quarterly credit and residency information that CPL will use to inform the state’s understanding of mobility, wildfire impacts, financial well-being, and student loans.

Key research findings

  1. The share of movers that leave the state has grown slightly since 2015, from 16% to 18%, a trend that continued in 2020 with no marked increase.
  2. Historically, the number of people leaving California tracks the number of people entering California, but this pattern deviated in Q4 2020, when 267,000 people left the state and only 128,000 entered.
  3. There is no evidence that wealthy households are leaving the state en masse. Their rates of exit track trends in less wealthy areas.
  4. Net exits from San Francisco from the end of March to the end of the year increased 649% as compared to the same period in 2019, from 5,200 net exits to 38,800.
  5. Approximately two-thirds of people who moved out of San Francisco remained within the 11-county Bay Area economic region, and 80% remained in California.
  6. Counties in the Sierra Nevada mountains and other parts of northern California saw huge increases in entrances by former Bay Area residents, with 50% and in some cases 100%+ more in-migrants in 2020 as compared to 2019.

This analysis used the University of California Consumer Credit Panel (UC-CCP), a new dataset created through a partnership between the California Policy Lab, the Student Borrower Protection Center, and the Student Loan Law Initiative.

The UC-CCP consists of data from Experian, and contains longitudinal information about adults with a credit history who have lived in California since 2004. Data includes each person’s ZIP code of residence, as reported by creditors, and credit information at a quarterly frequency. 

Moves were defined as changes in ZIP codes from one quarter to the next. The analysis is focused on reported moves (defined as the date when that move is reported to financial institutions and shows up in the dataset), which is expected to lag behind actual moves. More information about methodology was included in the report.

The California Policy Lab partners with California’s state and local governments to generate scientific evidence that solves California’s most urgent problems, including homelessness, poverty, crime, and education inequality. 

It facilitates close working partnerships between policymakers and researchers at the University of California to help evaluate and improve public programs through empirical research and technical assistance.