We’ve collected all our work on Virginia’s changing demography in one place; find it here.
Migration continues to make Virginia poorer, but not in the way you might think.
The people moving out of Virginia make more money than the people moving in from other states. However, the immigrants moving into Virginia from other countries are generally more affluent than the people already here.
That’s what the latest batch of migration data from the Internal Revenue Service shows. The trends are not new; they go back years, but they’re still worth repeating since immigration is a subject poorly understood but passionately argued nonetheless.
Meanwhile, the new IRS data gives us new insight into why Danville has started gaining population again after three decades of population decline, where the people moving out of Northern Virginia are going to, and what all these trends mean for Southwest and Southside Virginia.
Over the next three days — unless other news interrupts — we’ll take a closer look at these figures and what they tell us about how Virginia is changing.
First, let’s talk about what this data is and where it comes from. When we deal with population data, we’re almost always looking at numbers from either the U.S. Census Bureau or the Weldon Cooper Center for Public Service at the University of Virginia. However, there’s another government agency that deals with population figures, too: the IRS. The tax people know where you live, and every year the IRS files a report on migration, people who file their return in a different place than the year before. In some ways, the IRS is more accurate than the Census Bureau because it’s based on hard numbers. On the other hand, the IRS data can’t capture people who don’t file a tax return and these reports also run several years behind, so we’re just now getting data for 2023. We work with what we have. What we should focus on is not so much the specific numbers but the trendlines.
Here’s what some of those trendlines tell us:
The people moving out of Virginia make more money than the people moving in
For 2023, those who moved into Virginia filed tax returns that averaged $82,947 adjusted gross income per year, while those moving out filed returns that averaged $89,994. The IRS data goes back to 2005 and this has been the case every year, so this is a trend that’s been consistent across both Democratic and Republican governors, across both Democratic and Republican legislatures. That suggests we’re dealing with more structural forces than partisan policy decisions one way or another.
The three main destinations of taxpayers moving out of Virginia are North Carolina, Florida and Maryland, in that order. However, the biggest amount of outbound income goes to Florida.
The Virginians who moved to North Carolina in 2023 averaged $79,449 a year in income; those who moved to Florida averaged $118,662.
There are likely lots of reasons for this trend. The IRS data doesn’t supply those reasons, but we can guess at some possible ones. We know that North Carolina has a higher job growth rate than Virginia (in 2023, the year this data is from, North Carolina added more than twice as many jobs as we did), so it seems safe to assume that some of these moves to North Carolina are job-related.
We also know that Florida attracts a lot of retirees and that Virginia’s outmigration trends began years ago with those of retirement age, so it seems reasonable to conclude that many of those Virginians taking their higher incomes to Florida are retirees.
There may be no solution to the retirees’ desire to become sunbirds (although some might say lower income tax rates would help), but the solution to people moving to North Carolina (and elsewhere) for work would be to create more high-paying jobs here. Unfortunately, Virginia lost jobs last year and is forecast to lose jobs this year, for the second year in a row (see my previous column detailing those unhappy stats). In a perfect world, state policy-makers would be focused on how to create more jobs, especially higher-paying ones. I’m not saying they aren’t, but right now we don’t even have a state budget for the fiscal year that starts in about three weeks.
Virginia’s immigrants are more affluent than those moving in from other states
Those moving into Virginia from other states in 2023 filed tax returns that averaged $82,327 per year. Those moving in from other countries averaged $99,470. While this figure would not reflect those who don’t file tax returns, it still shouldn’t be surprising. A 2022 study by the L. Douglas Wilder School of Government and Public Affairs at Virginia Commonwealth University found that Virginia’s immigrant population is more highly educated than Virginians at large. A 2024 study by the Migration Policy Institute found that nationally, more recent arrivals were better educated than American citizens. To the extent that education correlates with income, a higher level of educational attainment naturally leads to higher income rates for immigrants.
There’s a notable trend at work here. Up until 2009, immigrants to Virginia made less than the residents already here. From 2010 onwards, they’ve made more. When people talk about how immigrants enrich America, they are usually talking about culture — food, music, traditions. In pure monetary terms, immigrants are making Virginia richer, something that rarely makes its way into debates over immigration policy but perhaps should. Slowing immigration slows economic growth.
Virginia’s most affluent new residents are immigrants in Loudoun County
Loudoun County is well-known as the most affluent county in America. This IRS data shows that the 2023 tax returns for people moving into Loudoun County from other states averaged $117,126 while those filed by immigrants averaged $160,144.
Next door in Fairfax County the figures were $104,968 for people moving in from other states and $129,894 for immigrants.
Here’s how those numbers in Loudoun County connect all the way to Lee County. Rural school systems get most of their money from the state, but where does the state get that money? The state’s biggest source of revenue is the income tax, and the single biggest source of income tax revenue is Northern Virginia. That means the tax rates even in the state’s westernmost county are related to the affluent residents — wherever they might be from — in Northern Virginia. Without them, Lee County taxpayers might have to pay more for their schools — and lots of other things — or do without.
I’ve written many times about how rural Virginia is ultimately tied to the economic fortunes of Northern Virginia; the regions may be demographically and politically dissimilar but they are economically entwined. These IRS figures show that this relationship is even more complicated (or perhaps straightforward, take your pick): Rural Virginia depends on immigration, even if those immigrants aren’t living there.
The Brookings Institution recently published a report that looked at the connection between immigration and economic growth. Their findings (which aren’t unique to that study) show that the strongest economic growth was in metro areas with the most immigrants. Brookings concludes: “The possibility that the United States may be entering a new era of negative net international migration is cause for concern, not celebration. Data from this year’s Metro Monitor — alongside decades of rigorous research — show that metro areas with increasing foreign-born population shares have experienced stronger economic growth, higher productivity, and better labor market outcomes for both immigrant and native-born workers. We find no evidence in the data that immigration undercuts economic dynamism or erodes economic opportunity; if anything, the opposite pattern emerges.”
The Brookings report is separate from the IRS data, but they all fit together to paint the same picture.
Tomorrow we’ll take a closer look at one place that really stands out in the data: Danville.
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