All but two states—Illinois and West Virginia—gained residents over the past decade, even as population growth nationally continued to slow. Following the long-term trend, the United States in 2018 grew at its weakest pace in more than 80 years, with nine states losing residents. Population trends matter to both state government finances and economic growth.
The fastest-growing states in the 10 years ending July 2018 were predominantly in the West and South. Topping the list were Utah, Texas, Colorado, and North Dakota, which each added people at more than twice the median rate and were among the top five in economic growth since the Great Recession began. States with fast-growing populations typically have strong labor force growth, which fuels economic activity and helps generate tax revenue to fund any increased spending on infrastructure, education, and other government services.
Top-ranked Utah’s population expanded by more than 498,000 since mid-2008, or the equivalent of 1.73 percent a year, and second place Texas’ grew by nearly 4.4 million, or 1.68 percent a year. Texas added more people but trailed Utah based on their 10-year growth rates, which measure the constant pace that population would have had to change each year since 2008 to reach its latest count. The median rate of growth among states was 0.63 percent a year.
The Northeast and Midwest were home to all but two of the 15 states with the slowest population growth. For a half-century, people have gravitated away from these regions and toward Sun Belt states because of employment opportunities, lower costs of living, and warmer climates.
Illinois and West Virginia were the only states with fewer residents in 2018 than a decade earlier. West Virginia lost about 34,500 people since 2008, or the equivalent of 0.19 percent a year, and has recorded population losses for the past six years. Illinois’ growth rate was virtually flat over the same period, shedding about 6,000 residents since 2008 and losing population for the past five years.
A shrinking or slow-growing populace can be both a cause and an effect of weakened economic prospects. Illinois and West Virginia, along with Connecticut, Mississippi, and Rhode Island, all fall near the bottom of both population and economic growth over the past decade. Less economic activity can limit state revenue collections. Though a smaller population can lead to a reduction in some types of spending, it also means there are fewer residents to help cover the costs of long-standing commitments, such as debt and state employee retirement benefits.
State populations grow or shrink depending on the net effect of births, deaths, and migration to and from other states and abroad, including documented and undocumented people. Population change measures the difference between all new residents—babies and newcomers from other states and outside the U.S.—and those who died or moved away.
While 10-year growth rates illustrate major trends that have helped shape a state’s economic and fiscal conditions, growth over the past year sheds light on shifts that affect near-term revenue collections and spending.
A comparison of 10-year population trends, based on each state’s constant annual growth rate between July 2008 and July 2018, shows:
More recently, population change from July 2017 to July 2018 shows:
Tracking annual changes over the past 10 years can identify inflection points in state trends. Michigan, for example, had the fifth-slowest growth rate over the decade, equivalent to 0.05 percent a year. It experienced heavy population losses during and immediately after the Great Recession but has gained residents for the past eight years.
Looking at year-by-year changes can also help differentiate states with similar 10-year trends. Hawaii (equivalent to 0.64 percent growth a year) and Massachusetts (0.65 percent) have comparable rates over the decade. But Hawaii’s population has been trending downward, with declines in 2017 and 2018, while Massachusetts’ has grown each year.
Population trends are tied to states’ economic fortunes and government finances. More people usually means more workers and consumers adding to economic activity as they take jobs and buy goods and services, which generates more tax revenue. A growing economy, in turn, can attract even more workers and their families. The reverse is usually true for states with shrinking or slow-growing populaces.
State officials study population trends, in addition to other measures, to forecast revenue streams and residents’ demands for services for budgeting purposes and long-term fiscal planning. The size of a state’s population, and annual changes, also factor into how much it will receive from some federal grants.
Some states have started to experiment with policy options to combat sluggish population growth. Maine and Vermont, for example, are offering financial incentives for people to relocate there. Future demographic changes increasingly are on state policymakers’ radar, as the U.S. Census Bureau forecasts that population growth overall and in many states will remain tepid. Growth is expected to slow because of declines in fertility rates alongside higher death rates, the aging of the Baby Boomer generation, and falling rates of international migration.
Population is just one factor underpinning a state’s finances, which also are shaped by policy decisions on tax collections and spending as well as factors outside a state’s borders and lawmakers’ control, such as commodity prices. To further understand the fiscal and economic impact of population change, fiscal analysts and demographers also study the shifting age and income mix of a state’s residents.
Download the data to see individual state trends from 2008 to 2018. Visit The Pew Charitable Trusts’ interactive resource Fiscal 50: State Trends and Analysis to sort and analyze data for other indicators of state fiscal health.
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