How Age and Income Influence State-to-State Moves 

In addition to state and county migration data, the IRS includes a key demographic detail in its state-level migration data: the age of the primary taxpayer. This post will examine the different migration patterns that exist between the age categories. The State Inflow tax returns (one of five return groups provided in the IRS dataset) are divided into six age categories and analyzed alongside seven adjusted gross income (AGI) classes. 

People have many reasons to move, but they are primarily economic and social, particularly early in life when career opportunities, education, and family considerations often drive decisions. Because of this, we expect to see relatively younger individuals making cross-country moves. And that is true for Texas, which, unlike other warm-weather states, continues to attract a significant number of movers under the age of 45. 

The total inflow of individuals to Texas gradually increases each year, while the age composition of the movers remains consistent. Approximately 60 percent of those moving to Texas fell within the 26–44 age group in 2020, 2021, and 2022 (Figure 1). This age group closely aligns with the Millennial generation, which represents the U.S. population’s largest demographic segment. Millennials are a key driver of migration trends and tend to prefer settling in larger urban areas. 

Domestic inflow trends across the United States also show a consistent pattern, with the age composition remaining relatively stable each year. However, the 26-44 age group accounts for only 55 percent of the total inflow, slightly lower than the corresponding percentage for Texas. 

Among the individuals in the seven income categories, the share of lower-income groups (AGI less than $25,000) gradually declines, while the proportion of inflow from higher-income groups (AGI $100K and above) increases over the three-year period for Texas (Figure 2). This trend coincides with the pandemic years, which saw heightened interstate movement and the rise of remote work, making Texas a popular destination for high-income movers. Texas has a relatively low cost of living and no state income tax, which can be particularly appealing to higher-income individuals looking to maximize their earnings. The availability of affordable housing in Texas compared to other states may also be a factor, and Texas’ growing reputation as a hub for technology, finance, and energy further bolstered its appeal.  

In the U.S., the proportion of state-to-state movers from higher-income groups also increases over the three-year period, though at a slightly slower pace than in Texas (Figure 2). This highlights how higher income levels play a pivotal role in enabling relocation, with Texas experiencing a more pronounced effect, likely due to its economic advantages and lower cost of living.