Minnesota is losing residents to other states

Yesterday, I wrote about how Minnesota’s population has long lagged that of the United States. As we explain in our new report, ‘Taxes and Migration Minnesotans on the Move to Lower Tax States,’ part of that is down to our state’s persistent loss of residents to other states.

The data shown in Figure 1 from both the Census Bureau and the Internal Revenue Service tell us that the net domestic migration of people into Minnesota turned negative in 2002 and remained negative until 2017. That year and the following, our state actually gained residents on net from other states and some heralded this as a vindication of public policy here. However, this inflow dried up as suddenly as it had come: In 2019, Minnesota lost 965 residents on net according to the Census Bureau and in 2020 the net loss was 9,757, the third largest net loss of residents to other states in thirty years. Interestingly, the migration numbers for the Census Bureau’s American Community Survey report clear and consistent net outflows from Minnesota in recent years.

Figure 1: Annual net domestic migration in Minnesota

Sources: Census Bureau and Internal Revenue Service

Comparing the three decades of the 1990s, 2000s and 2010s, Minnesota experienced a net gain of 86,847 people in the 1990s, but net losses of 43,962 in the 2000s and 27,569 in the 2010s, according to the Census Bureau. Positive net migration from abroad means that Minnesota still generally sees positive net migration figures overall. But, once in Minnesota, these people can then join the net domestic outflow of migrants.

Net domestic migration is the number of people moving to the state from elsewhere in the United States minus the number of people moving from it to other states. Data suggests that Minnesota’s net losses are driven largely by people declining to move here. Figure 2 shows the inflow and outflow of people as reported by the Internal Revenue Service. Both the inflow and outflow consistently increased through the 1990s. However, in the 2000s the outflow of people leaving Minnesota plateaued while the inflow of people dropped. Thus, the decline in the net number of people moving to Minnesota is primarily due to fewer people moving into Minnesota.

Figure 2: Minnesota’s annual inflow and outflow of taxpayers and dependents

Source: Internal Revenue Service