How Successful Is Your Region at Retaining Its Native Residents

Introduction

How can our region stop people from moving away? This question regularly arises in conversations among local leaders across the country. Before asking this question, it would be helpful to know whether one's region is already successful at keeping its native residents. Using long histories of individuals' locations drawn from the Federal Reserve Bank of New York/Equifax Consumer Credit Panel, we can begin to answer this question by measuring retention. We find that Fourth District metros with populations of greater than 1 million are better than average at retaining their natives but that retaining a high share of natives is not associated with strong regional population growth.

Data and Definitions
The estimates of individuals' long-run patterns of migration are created with a random, anonymous sample drawn from credit histories maintained by Equifax, known as the Federal Reserve Bank of New York/Equifax Consumer Credit Panel (CCP). Almost nine of 10 adults in the United States have accounts with creditors (for example, mortgages, student loans, auto loans, and credit cards), and these lenders report billing addresses to the credit bureaus each month. The CCP data include the county that contains the borrower's billing address, and this enables us to observe each quarter whether an individual is living in their home region or another region. When borrowers first apply for credit, we designate them as a native of the region in which they are living.¹Because the CCP begins in 1999, we must limit the analysis to people born in 1981 or later, as credit histories do not start until age 18 (typically between 18 and 23) and we need to observe people when their credit history begins to accurately place them in their home region.

Some of the results presented below are disaggregated by credit score. The score available in the CCP is the Equifax Risk Score. Like other credit scores, it uses information in borrowers' credit records to predict the probability of their becoming delinquent on debts.

In this District Data Brief, the term "metro" refers to a Core-Based Statistical Area (CBSA) as defined by the Office of Management and Budget (OMB). The US Department of Agriculture groups rural counties into regions called "commuting zones" (CZs) based on how frequently people drive between the counties for work. We use the CZ definitions for all nonmetro counties so that we can include all counties in our calculations. We define "large metros" as those with populations of greater than 1 million for graphs of the top-10 and bottom-10 metros. To better illustrate certain relationships, the samples in scatterplots include all regions with populations of greater than 500,000.

Retention of Natives

We calculate our measure of native retention by dividing the total number of quarters that native individuals are living in their home region by the total number of quarters we can observe for every person native to that region in the CCP data. Figure 1 shows this measure for the top 10 and bottom 10 large metros nationally in terms of native retention. Among the top 10 large metros, some, including Houston, Dallas, and Phoenix, are fast-growing. Meanwhile, others, such as New York, Los Angeles, Chicago, and Memphis, are slow-growing. The bottom 10 large metros include some that are seeing rapid growth, such as Austin, Orlando, and Raleigh. They also include Honolulu and San Jose, which have some of the highest costs of living in the country.