North Dakota’s economic performance and success is not news anymore. Well, alright, its news, but most people know about it. I have given interviews to media outlets around the country and the world about it, as have many others. So it is not a secret. So if there was an economic motive to migration, and there often is, people already know about it. Here is a graph of ND population change, migration in, and migration out. I calculate migration out as the difference between migration in and total population change.
Housing issues of all sorts are a hot topic nationally, not just in Grand Forks or North Dakota. I thought we could look at price levels for three different geographic regions. The first is the Grand Forks metro area since that is one of the topics most frequently mentioned in my appearances on the Jarrod Thomas Show (1310 KNOX radio in Grand Forks). The next area is North Dakota and the last is the United States as a whole.
The growth occurring in North Dakota as a whole, and in most of the sub regions within the states, is quite impressive as media stories no doubt impart. Being a dismal scientist I pointed out many times here and on the Jarrod Thomas Show (1310 KNOX AM, shameless plug I know) that the growth in the oil patch represented a potential constraint on growth in communities like Grand Forks. While many disagreed with me I offer up the following trends that should give people pause.
In a post last week I compared the allocation of economic activity in North Dakota with the United States. North Dakota has a larger share of activity in agriculture and extractive industries, but less in industries like information. There are many factors that influence the share of economic activity including resource endowments, transportation networks, and the list goes on. Consequently you need to be careful drawing policy conclusions from differences in allocations between two geographies. It could be very easily explained by resource endowments, such as oil in the ground.
One of the more common questions I get, from students, people at the store, on the radio, is: how would the U.S. economy would perform if it was more like North Dakota? It is a natural question given the strong performance in North Dakota and the weaker performance in the U.S. At some level this makes the comparison of growth a bit more consistent because the distribution of activity is made identical between multiple regions. In demography/population analysis (a class I am teaching this summer) the process is called standardization. It is essentially the same idea as calculating real gross domestic product with base year prices to control for the effects of price changes on growth. So lets take a look at unemployment and real GDP for the US, MN, and ND.