On October 25, 2023, the Illinois Policy Institute (IPI) posted a critique of A Decade of Illinois’ Migration Patterns: Providing Demographic, Geographic, and Socioeconomic Context, a new study released jointly by the Illinois Economic Policy Institute (ILEPI) and the Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign. To ensure a robust and methodologically sound analysis, the Illinois Economic Policy Institute (ILEPI)—a nonprofit research organization with a diverse and bipartisan Board of Directors—coauthored the study with the Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign, an academic partner.
This post sets the record straight on critiques that are exaggerated and oversimplified.
First, the ILEPI-PMCR study states that “according to the official counts, Illinois had 12.83 million residents in the 2010 Census and 12.81 million residents in the 2020 Census, a decline of about 18,000 residents. Moreover, a post-Census review by the U.S. Census Bureau found that Illinois’ population was likely undercounted by 2%, meaning that Illinois actually had around 13 million residents in 2020.” Those are facts.
The ILEPI-PMCR study concludes that Illinois’ population was relatively stable over the last decade and that reports of Illinois’ population decline have been greatly exaggerated. Indeed, the Post-Enumeration Survey did find that Illinois was likely undercounted by 2%. Based on this review, the Governor has submitted a formal request to the U.S. Census Bureau that it update its count for the state. While this would not change the official count, the corrected number would be included in the “Population Estimates Program” that determines how federal funds for important programs like Medicare, affordable housing, infrastructure investments, and other essential programs are distributed. This is especially important to Illinois because the Population Estimates Program is the very Census program that projected that Illinois was only going to have 12.59 million residents in 2020, itself a 2% undercount from the official Census count of 12.81 million.
Critiques that the ILEPI-PMCR study did not include basic exemptions in analyzing Illinois Department of Revenue (IDOR) tax statistics misunderstands the key takeaway that Illinois’ tax base has expanded.
Tax return data is useful to include because it can provide additional information on changes that are occurring within a state, but it is only partially complete because it does not include people who do not file taxes. People who do not earn incomes are not included in tax statistics, but are included in Census counts and in household surveys.
With that said, Illinois Department of Revenue tax returns between 2010 and 2020 generally corroborate a finding in the official Census count that the Chicago area added population and Downstate lost population. The tax return data show that the Chicago area added 203,000 taxpayers (a gain of 6%) while Downstate lost 3,000 taxpayers (a loss of 0.2%).
Overall, the data show that Illinois added more than 200,000 taxpayers between 2010 and 2020, a 4% increase statewide. Additionally, there was an 80% growth in taxpayers earning over $500,000 per year and a 52% gain in those reporting between $100,001 and $500,000 while those claiming Earned Income Credit (EIC) government assistance fell by 11%.
While exemptions could potentially be useful to include, they would simply be estimates in Illinois, because the state eliminated exemption allowances for high-income taxpayers in 2017. However, this is the group of taxpayers that has grown the most over the decade. Assumptions would need to be made about how many exemptions these households would claim, and the resulting population estimate could swing wildly depending on the built-in assumptions.
The data that is objective and not based on any assumptions is the number of tax filers. That data shows that the tax base has grown and that Illinois has become higher-paid. It does not show a state in decline.
Critiques that continue to focus exclusively on “net domestic migration,” or people who move within the United States, present an incomplete picture of migration patterns.
IPI’s critique references U-Haul, United Van Lines, and Allied Van Lines moving company data and inserts a graph with Internal Revenue Service (IRS) and Census Population Estimates Program data on net domestic migration. The graph suggests that Illinois lost 966,000 residents from 2011 through 2020. This means that Illinois added around 948,000 more people from births minus deaths and from net international migration in order to get to a minimum loss of 18,000 residents between the two Census counts, but the IPI offers no explanation for where these extra 948,000 people came from and provides no insight or an additional graph for supporting context.
Actual data reveal that that while Illinois did lose residents to net domestic migration, these losses were almost entirely offset by people moving into Illinois from abroad—a group which includes active-duty military, students, and expatriates returning home as well as legal immigrants with advanced degrees and H-1B visas, asylum-seekers and refugees, and undocumented workers. The vast majority of people from abroad have been between the working ages of 18 and 54 years old (67%). Understanding the makeup of migrants from abroad is essential for presenting a complete picture of immigration trends as well as explaining why Illinois’ population has been relatively stable over the past decade.
The IPI’s critique focuses on income changes in one year, 2020-2021, which is a selective use of data during a once-in-a-century pandemic.
The IPI relies on net domestic migration data from the IRS to suggest that Illinois lost residents from every income bracket. The first problem is that IRS data do not include people who do not file taxes. If people who do not earn incomes are more likely to move out, then the average household income of leavers is lower than a reliance on IRS data would indicate. The second problem is that the data are only for one year (2020-2021).
While this may have been true for one year during a once-in-a-century pandemic, the ILEPI-PMCR study looks at taxpayer data and household survey data over a decade and includes more observations rather than fewer. The study also notes that post-pandemic dynamics may have resulted in new migration patterns that diverge from earlier trends, but recent data appear to show migration returning to pre-pandemic trends and levels.
Finally, the data show that people do not leave Illinois primarily due to high taxes or its estate tax structure.
The IPI’s critique cites surveys of people who are “considering” moving out of state (sometimes with leading questions) which claim that taxes are a reason. The opinion poll findings indicate a moment-in-time possible preference to do something, but do not show what respondents eventually end up doing.
By comparison, the ILEPI-PMCR study shows the revealed preferences of those who actually did move, both out of and into Illinois, using responses from the Current Population Survey Annual Social and Economic Supplement, an authoritative, industry-standard dataset.
In the Current Population Survey Annual Social and Economic Supplement, the number one reason cited by all movers—whether into or out of Illinois—was related to jobs and employment changes. Job-related reasons offered by the U.S. Census Bureau in the survey include new jobs, job transfers, and easier commutes. Fully 39% of people who moved out of Illinois left due to job-related reasons, 40% of people who moved into Illinois from other states did so for job-related reasons and so did 36% of those who arrived from abroad.
While tax policy can affect the job market, so do investments that the government makes with the revenue it collects, which critics of the ILEPI-PMCR analysis seem to ignore entirely. If tax policy is affecting the main reason people leave Illinois (jobs), it is not affecting the main reason people move to Illinois (jobs). While tax policy can affect the housing market, housing is the primary reason why 22% of people moved out of Illinois, but also why 16% of people moved in from other states and 17% moved here from abroad. Only 30% of those who left Illinois became homeowners within their first year in their new states.
While critics complain that the Census Bureau does not specifically list “taxes” as an option for why people chose to move. Census researchers list the most common options that have been reported for decades, which historically have been for economic, family, housing, and education-related reasons. However, respondents can reply with “other.” In the ILEPI-PMCR report, the “All Other Reasons” category includes retirement and change of climate but could include those who felt taxes were their primary reason. The share of outmigrants reporting these other reasons for moving from 2013 through 2022 was 12%.
Lastly, critics sometimes cite net domestic migration data from the IRS for one year (2020-2021) to claim that the most popular destinations for outmigrants were in states with lower tax burdens than Illinois. The ILEPI-PMCR study takes a longer view and shows that, between 2013 and 2022, Illinois experienced negative net domestic migration at relatively equal rates to both “high-tax states” and “low-tax states.” These losses from net domestic migration were mostly offset by gains from people moving into Illinois from abroad.
In conclusion, critiques of the ILEPI-PMCR analysis are unfounded because they are based on an incomplete, distorted, and often oversimplified picture of migration changes in Illinois.
Critics fail to acknowledge that Illinois’ population has been stable over the past decade and to explore in detail who is not only moving out of state but also who is moving in and who is choosing to stay, which can lead to better public policy on attracting and retaining residents. That is primarily because they continue to exclusively rely on “net domestic migration” and one or two years of data. Voters, the media, and elected officials are better off when policy researchers and academic professors deliver social science that is evidence-based, analyzes broader trends, and fills in missing pieces of the puzzle.
