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Jan 30, 2025

Cross-Country Relocation

How Age and Income Impact Migration Outcomes

What financial expectations do people have when they move to Texas from another state? Do those expectations pay off? If so, for whom? Here’s what the numbers say.

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By
Mallika Natarajan

In a previous post, I examined the age and income of individuals relocating to Texas. We saw that while the proportion of younger individuals has remained steady, they continue to make up a significant share of those moving to Texas. However, the proportion of wealthier individuals moving here has increased in recent years. 

This analysis will discuss how the movers fared in Texas after the cross-country move and whether the likelihood of a relocation from a different state varies by age and income.  

Each IRS data release includes annual gross income (AGI) for the current and previous year and the number of individuals filing in the current year. This makes it possible to calculate, for example, the average income of movers in both 2021 and 2022 and show the difference between the average incomes for those years (Figure 1). 

Not all relocations lead to positive financial outcomes. The red portion of Figure 1 shows where income decreased from the previous year, likely because of a change in financial position. Some have slipped into a lower income category as is seen by the income decrease being greater than the income category of <$10K. Factors such as layoffs or unemployment may have prompted people in lower-income groups to move to Texas expecting improved financial prospects. However, for the initial year, these expectations often did not materialize. This is especially evident in the <10K and 10–25K income ranges, where average incomes declined across almost all age groups, highlighting their vulnerability during such transitions. Additional details, such as occupation categories, could offer further insights into these trends. 

Another possible reason for the lower income could be that the individuals came here from states with higher minimum wages, which could explain the negative income difference in the second year. Currently, about 30 states have minimum wages above the federal minimum wage of $7.25 per hour. In contrast, Texas adopts the federal minimum wage rate, which has remained at $7.25 per hour since 2009.  

We saw the trends and insights using the raw state inflow numbers, but to evaluate movers’ likelihood of relocating based on income and age, we calculate the migration likelihood percentages for different age groups and compare them. The result? Moving is a costly venture, and the most likely to move are those with relatively higher incomes within each age category (Figure 2).  

The three age groups most likely to relocate in 2022 were <26 yrs, 26-34 yrs, and 35-44 years. The under-26-years group showed the highest rate of relocation activity. Within that age group, the income group >$200K had the highest rate at 11 percent. In every age group, the rate increased with income, highlighting a strong correlation between income and the likelihood of moving. The sole exception was the <$10K income group, which had elevated rates across all age groups. 

Relatively younger and wealthier individuals are more likely to make the relocation move. Common reasons for moving to Texas include its strong job market, affordable cost of living, and favorable tax policies. Relocating can be costly, and adapting to a new environment involves effort and expense, though the process may be less taxing for those with greater financial stability.  

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