One study evaluates the impact of public education and other factors on migration to rural areas. Better school performance, measured by student test scores in reading and math, encourages migration to these areas.[73] Better schools also generate higher wages and job growth. However, the authors review related literature and caution that school expenditures are not a good predictor of school quality. On net, the impact of increasing public expenditures on education is mixed, especially if the spending is not strongly linked to improving academic outcomes.[74]
State-level welfare programs differ in terms of both level of benefits and strictness of eligibility rules. Evaluating data from 1996-1999, a group of economists found that low-income households tended to move toward states with greater welfare benefits but that the stringency of rules had no discernible effect on migration patterns.[75]
One study evaluates the effect of Medicaid expansion in Massachusetts in 2010. The authors find that Massachusetts’ health insurance subsidies for low-income individuals led to significant population inflows to cities very close to the state border. The effect dissipated rapidly, however, with distance from the border, suggesting there is a hard limit to the population effect that larger welfare benefits might create.[76] More generous state-level welfare seems to attract in-migration, but it appears that the type of program matters; general financial assistance seems to be more important than assistance for specific services like health care.
“The idea that tax policy may affect the location decisions of individuals has a long tradition in economics,” a 2000 paper observes.[77] To test this theory, the authors examined the existing literature evaluating evidence surrounding the propensity of people to move to lower-tax locations. “[T]he mobility responses documented in some of the recent literature are striking and perhaps surprisingly large,” they found, but they caution that these impacts may not be universal. The authors also emphasize that amenities and public goods and services attract people, and thus the deterrent that higher taxes generate may be offset to some extent by the draw that government spending may provide.[78]
How taxes are spent matters. As noted elsewhere in this report, using public money to fund certain business ventures, design areas to have a specific feel, use transportation infrastructure to attempt to grow certain areas, or otherwise copy successful places tend to be ineffective. Reducing crime and improving school quality seem to be more important goals for trying to grow a state’s population.[79] These are not easy tasks. Policymakers have launched many attempts to reduce crime and improve schools over the last few decades and often have little to show for them.