Dallas Fed’s Report Highlights Immigration and Economic Transformation in Texas

By Vance Ginn, The Texas Public Policy Foundation

The Federal Reserve Bank of Dallas recently released a report entitled “Gone to Texas: Immigration and the Transformation of the Texas Economy.” This report sheds further light on Texas’ population explosion from people moving here from other states and around the world who want to benefit from rapid job creation and enjoy many other benefits that those who live here know all too well.

Here are several key takeaways from the report:

  • Texas economy provides a reason to move:
    • “In 2012, Texas was the nation’s second-fastest-growing economy, behind only North Dakota.”
    • “The state’s business environment—relatively low taxes and few regulations—has been crucial to luring and retaining talent. People have relocated to Texas because of abundant job opportunities, a low cost of living, affordable homes, and a relatively low tax burden.”
  • Migration to Texas from other countries:
    • “Among large states, none has experienced a surge like Texas has, with immigrants rising from 9 percent of the population in 1990 to 16.4 percent in 2012.”
    • “The number of foreign born living in Texas has increased by an average of 125,000 a year since 1990, rising from 1.5 million to 4.3 million.”
    • “The majority of Texas immigrants—60 percent—are from Mexico, followed by immigrants from Asia and the rest of Latin America. For the rest of the country, Asia is the most common region of origin, followed by Mexico.”
    • “Immigrants in Texas are less educated than U.S. natives in the state.”…“Although Texas immigrants lag the nation’s immigrants in schooling, U.S. natives in Texas are near parity with U.S.-born adults in the rest of the nation.”
    • “One in six immigrants living in Texas report having no English-speaking skills, and another quarter say they do not speak English well. How well an immigrant speaks English is the single most important factor determining whether he or she is poor.”
  • Migration to Texas from other states:
    • “Since 2004, California has been the largest sending state by far—nearly one quarter of net domestic migration to Texas between 2006 and 2012 came from California.”
  • Lessons other states might learn from Texas:
    • “First, rapid economic growth and development require the inflow of factors of production”;
    • “Second, market forces are the best guide for what types of labor best meet businesses’ demands”;
    • “Third, policy that does not take into consideration both supply and demand factors may well become irrelevant, as the U.S.—and Texas in particular—has seen with illegal immigration”;
    • “Fourth, there is a trade-off between low-skilled immigration and the provision of publicly provided services, particularly if the tax burden is low”; and
    • “Last, high-skilled migration is crucial for economic development.”

The report also discusses potential advantages and challenges a rapidly increasing population can take on private sector and public sector resources. If the state continues to lead the nation in job growth and more Fortune 500 companies move here because of the benefits of the Texas model, it is a good bet that more people will want to move to the Lone Star State and state legislators will have tough decisions to make.

Vance Ginn, Ph.D., is a policy analyst in the Center for Fiscal Policy at the Texas Public Policy Foundation in Austin, TX.


Dallas Fed’s Report Highlights Immigration and Economic Transformation in Texas

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