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Georgia’s economic development growth affected by migration

March 29, 2017 | Services & Research

By Mathew Hauer

Mathew Hauer

Georgia’s economic development growth affected by migration

Economic development is typically framed as a way of attracting businesses, but can there be economic development by attracting individuals?

To examine the amount of economic development that counties could be experiencing due to net-migration (the in-migrants minus the out-migrants), I analyzed the Internal Revenue Service’s (IRS) annual series of county-to-county migration data for the years 2014-2015. This dataset is produced in conjunction with the US Census Bureau and utilizes the IRS Individual Master File containing every Form 1040, 1040A, and 1040EZ processed by the IRS and includes 95 to 98 percent of all individual tax filers and their dependents. The Census Bureau identifies migrants when a current filing years’ return is from a different location than the matched preceding years’ return. These data present migration patterns of where Americans move to and from and the total adjusted gross income (AGI) of tax filers.

IRS Map

If we subtract the AGI of tax filers moving from each county from the AGI of tax filers moving to each county, we can estimate the net-change in household income for each county in Georgia. For instance, let’s say we have a county where one person moves in and one person moves out. The AGI of the person moving out is $40,000 and the AGI of the person moving in is $60,000. Even though this hypothetical migration’s net effect on the population total is 0, the county is $20,000 richer simply because the person moving in is $20,000 wealthier than the person moving out.

Georgia has two counties in the top 100 in the United States’ for “economic development” solely through migration: Forsyth and Hall counties. Migration alone plugs an additional $150 million in household income into these communities each year. However, only 69 counties in Georgia see a positive change in household income from migration, the remaining 90 counties are either seeing their household income decrease year-over-year or rely on organic income generation through other forms of economic development.

IRS Migration