by Adam Ozimek and Connor O’Brien
Key Findings
- Though large urban counties have not yet rebounded from large population outflows experienced in 2020 and 2021, they did nearly halt overall population loss in 2022, buoyed by more normal rates of international migration.
- Exurban and suburban counties continued to benefit from domestic migration, adding over 800,000 new residents from other county types on net.
- Remote work-related factors continued to drive domestic population movements in 2022, though they were less important than between 2020 and 2021.
- Rising home prices in places with inelastic housing supplies are likely slowing migration to counties that might otherwise benefit more from remote work.
Introduction
New data on 2022 county-level population changes continue to suggest that the pandemic is having profound and lasting impacts on economic geography. In important ways, however, these developments have slowed in 2022 compared to the drastic changes seen in 2021. In particular, large urban counties pared population losses from 2021, but have not seen renewed growth overall.
The dominant story from last year’s county-level population trends was the Covid-era flight from big cities to suburban and exurban communities. Revised data since 2020 shows large urban counties saw combined population losses of 812,000 between July 1, 2020 and July 1 2021. The rate of population loss in such counties slowed nearly to a halt through July 2022, a 12-month period during which urban counties saw combined declines of just 70,000 residents.
Smaller urban counties bounced back somewhat, as well. In 2021, these counties saw population growth fall substantially compared to pre-pandemic rates, but did not experience an outright decline in population. In 2022, growth rates bounced back to 0.46% from 0.25% in 2021, adding 233,000 people in the last year—close to small urban counties’ growth of 0.56% in 2019.
Exurban and suburban counties continued to grow the fastest in 2022 after seeing major influxes of domestic migration during the early pandemic era. These counties grew by another 832,000 in 2022 after adding 931,000 people in 2021, amounting to a 0.93% jump from 2021.
Domestic migration continued to boost suburbs and exurbs while a major increase in international migration shielded urban counties from larger population declines.
Two trends drove changes in growth rates by county type in 2022. The first was the dramatic bounceback in net international migration. As restrictions on international travel were phased out and visa issuances picked up, net international migration to the U.S. nearly tripled between 2021 and 2022, from 376,000 to over one million people. The normalization of annual immigration levels was indeed the principal cause of U.S. population growth more than doubling between 2021 and 2022.
Large urban counties were the main beneficiaries of increased immigration rates in 2022, adding 507,000 residents through this channel in 2022, up from 186,000 in 2021. In all, urban counties of all types captured nearly two-thirds of the 635,000 net increase in international migration between 2021 and 2022. Suburban counties benefitted in part, nearly tripling their net immigration rate from 64,000 to 170,000.
Domestic outmigration from large urban counties to suburbs and exurbs continued in 2022, though at a slower pace than the year prior. Over 1.2 million people left large urban counties between July 1, 2020 and July 1, 2021, with nearly 800,000 flowing into the suburbs and exurbs; this movement continued to a lesser degree in 2022. Large urban counties trimmed losses to 861,000 last year, while inflows to the suburbs halved and domestic migration to exurban counties fell by one-quarter.
Examining the very largest urban counties, we see the extent to which the increase in international migration shielded major cities from larger population declines. In eight of the top ten counties by 2022 population, domestic migration was a net drag on growth, with Maricopa County, AZ (Phoenix) and Clark County, NV (Las Vegas) standing out as major exceptions.
Despite this modest softening of population losses, large urban counties’ population trends have still not normalized, and domestic outmigration is still well above rates experienced in the years immediately leading up to the pandemic. Outflows from these counties were already dramatically accelerating over the last decade, as the nation’s largest cities confronted spiraling housing cost crises and other challenges.
Remote work remains an important, but diminished, explanatory factor in population shifts.
Digging deeper into what has driven demographic trends this year, the relationship between fundamentals and population growth has changed from 2021. In particular, we follow-up on our previous work that examined how work-from-home related fundamentals are driving population growth changes. At a high level, we see much less clear relationships in 2022—start with the relationship with expensive housing markets. The graph below shows how the change in county-level population growth in 2021 compared to 2019 is related to the expensiveness of the housing market. What we see is that the most expensive places in 2021 saw the greatest population loss. Outside of the most expensive housing markets, population loss is more weakly related to housing prices.
In contrast, we see a noisier and more linear relationship between 2022 population growth rates (again minus the 2019 rates) and median home values. Population trends in 2022 were less driven by the expensiveness of the housing market than they were in 2021.
Looking more systematically, when we rerun our regressions from last year, work-from-home related fundamentals are less likely to be significant drivers of population growth in 2022. It is not just expensive housing markets that have declined in explanatory power—overall, the r-squared has fallen from 0.46 to 0.17. Housing costs, the share of housing that is used seasonally, and the share of commuters coming from outside the county– all statistically significant factors in explaining 2021 growth–have lost their predictive power. Only the relationship with the share of workers commuting is now insignificant in all county types; however, the significance of most of the variables has declined as well.
The return to more normal levels of international migration might be one reason behind this reduced explanatory power, potentially swamping the effects of remote work on domestic county-to-county migration when looking at overall population growth. To examine whether net domestic migration is more strongly driven by work-from-home related factors, we rerun the same model but use change in net domestic migration rates (2022 minus 2019) as the dependent variable. We do see an increase in explanatory power here, for example, with home values significant in half of county types and an overall r-squared of 0.25. However, this is still far less significant and has less explanatory power than when 2021 domestic migration rate is used as the dependent variable, which resulted in an r-squared of 0.44 and more statistically significant variables.
The way in which housing markets are responding to population growth may be another factor, potentially limiting domestic migration. As research from Howard, Liebersohn, and Ozimek and others has shown, housing markets are responding to remote work-driven demand shifts with higher rents and prices. This will be especially binding in places where housing supply is inelastic due to either zoning and geographic constraints in the long-run, or construction worker and raw materials inputs in the short-run. Indeed, running the same models as above for 2022 but including housing supply elasticities from Baum-Snow and Han (2023) in the counties where the estimates are available, we find more elastic housing markets predict greater net domestic migration in exurban, small urban, and suburban counties. In contrast, housing supply elasticity was insignificant for domestic migration in 2021.
Conclusion
Overall, we find that large urban counties continue to lose population post-pandemic, but at a more modest pace. Consistent with this, we find work-from-home related fundamentals remained important drivers of population shifts in 2022 but less than they were in 2021. One reason may be that the shift to remote work early in the pandemic was a one-time shock and this led to a one-time, temporary change in migration patterns, which are now converging towards normal. Alternatively, remote work may have an impact on migration patterns that will take a longer time to unfold. In this case, the weaker relationship with work-from-home fundamentals may be due to housing supply becoming a more binding constraint to work-from-home-driven population shifts. In this view, while work from home has the potential to help people live where they want subject to less constraints, this is only the case if those places build enough housing. Survey evidence as of November 2021 suggests that nearly four times as many people planned to move because of remote work as had moved already, providing some evidence that the long-run impact is still unfolding. Ultimately, the evolution of the remote work labor market and local housing markets will be crucial determinants.
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Appendix: County definition methodology
Large urban counties intersect with an urban area with a population of 250,000 or higher. If multiple counties intersect the same urban area, the county with the highest population density was selected. Small urban counties intersect an urban area with a population of 100,000-250,000. If multiple counties intersect the same urban area, the county with the highest population share in a midsize city based on NCES definitions, is classified as small urban and the other counties as suburban. Suburban counties have an urban area with a population of 50,000 to 100,000. At least 25 percent of the population must be in a large or medium-sized suburb, based on National Center for Education Statistics (NCES) definitions, otherwise it is classified as exurban. If no population at all is in a large or medium-sized suburb, then it is classified as rural. Exurban areas have a population smaller than 50,000, at least 25 percent of their population in a large or medium-sized suburb and must be in a metro with a population of 500,000 or higher. All remaining metropolitan counties are classified as metro rural and all non-metropolitan counties are classified as non-metro rural.
