Nearly 450,000 out-of-state driver’s licenses, or 37,295 a month, were turned in to the Arizona Department of Transportation’s Motor Vehicle Division (MVD) last year, up by about 10,000 (2.3 percent) from 2007 (Table 1).

The number of out-of-state driver’s licenses surrendered can be used as a proxy to measure changes and intensity of migration to Arizona and with other factors help estimate Arizona adult population growth and origination (see About Data). The surrendered license data, however, is not an actual count of population in-migration. MVD does not know if the surrendered driver's license represents one person or a family of four, plus it does not publish data showing the number of former Arizonan's turning in driver's licenses in other states, therefore not providing a complete picture of this data.

The largest increases in out-of-state driver's licenses surrendered in 2008 came from Michigan (up 1,453, or 8.3 percent) and Washington state (up 1,145, or 6.5 percent). The growth in the number of Michigan licenses surrendered helped The Wolverine State jump over Washington for fourth highest total number of out-of-state licenses surrendered (18,873), while Washington stayed at No. 5 (18,783). Michigan has steadily risen in the rankings of driver's licenses surrendered to Arizona over the past five years, having ranked as low as ninth in 2004.

Migration estimates from the U.S. Census Bureau confirms an increased movement - and across all age ranges - out of Michigan the past several years, said Michgan's State Demographer Ken Darga. Due to high unemployment, Michigan has seen net out-migration steadily grow since 2001, reaching nearly 100,000 in 2008, but still below the 150,000 levels of the 1981-'83 recession period. Darga said typically Michigan's out-migration pattern is skewed more to retirees, but in recent years it has occurred across all age ranges. Darga also said that Arizona is getting a fair share of the out-migrants, similar to states such as Florida and Texas, two primary destinations of Michigan out-migrants. In 2008, Michigan led all states in its rate of net out-migration to other states, 1.1 percent, up slightly from 1 percent in 2007 when Michigan had the nation's third-highest rate.¹

Reviewing the Top 10 states' surrender data for 2008, perennial No. 1 California, which accounts for about a quarter of all license surrenders, saw a slight decline in licenses submitted (859, or -0.8 percent) to 104,543, while No. 2 Texas had an increase of 814 (3.4 percent) to 24,605 and Illinois was essentially unchanged at No. 3 with 22,803. It was the second straight year Texas edged out Illinois, which had held the No.2 spot between 2004 through 2006. States ranked sixth to 10th, respectively, were Colorado (18,614), Florida (16,427), Nevada (14,450), New York (14,439) and New Mexico (13,710). Of these states, only Florida's numbers varied much from 2007, increasing about 700, or 4.6 percent.

The state of Georgia, which ranked 22^nd this past year with 5,614 former residents surrendering licenses, had the largest percentage increase (9.9 percent), followed by North Carolina (8.9 percent), Michigan, Tennessee (6.8 percent) and Washington. Ten states and the District of Columbia had fewer driver's liceneses surrendered in 2008 than 2007. Noteworthy was New York, which was down by 449 (-3.0 percent).

Several interesting trends emerged and continued in 2008. For the first time since MVD began publishing this data set in 1996, the state recorded 40,000 or more liceneses surrendered for four consecutive months (July-October). Prior to August 2008, only one other time had out-of-state license submissions reached 40,000 or higher for two months in a row (July-August 2004) (MVD historical data.)

In addition, for the fifth straight year Arizona averaged between 36,700 and 37,600 out-of-state licenses surrendered a month, and for the past two years the numbers have remained level (see Chart 1). This occurred against a backdrop of a slowing Arizona economy in the second half of 2007 and all of 2008. It would have seemed reasonable to expect some reduction in residents relocating to Arizona, particularly in 2008, as a certain percentage of homeowners contemplating a move to the state likely put off selling their homes until the their housing market and Arizona's economy stabilized.

Census Bureau in-migration estimates for Arizona and data on first-time Arizona driver's license holders provide clues as to why license surrenders held up the past two years. In 2007 (the latest data available), 24.9 percent of the state's total in-migration came from the 20 to 29 age group, compared to that age cohort making up only 14.4 percent of the state's existing population, according to the Census Bureau's American Community Survey (see Table 2). At the same time, the survey showed older age groups (40 and over, and 65 and over) came into Arizona at rates much smaller in proportion to their existing populations.

MVD data on the number of first-time (original issue) Arizona driver's license holders paralleled the in-migration age trends of the past two years. Although based on fiscal years (July 1-June 30), Arizona annual data for FY 2006-'07 and FY 2007-'08 shows that the 20-29, 40 and over and 65 and over age groups obtained their first Arizona driver's licenses in almost the same proportions as the Census data showed migrated to the state (see Table 3). In both fiscal years, the 20-29 age group accounted for about 25 percent of original driver's licenses issued, while the 40 and over age group comprised about 33.5 percent of first-time license holders, and 65 and over made up about 6.6 percent. Only the 65 and over group varied to any degree, 3 percentage points below the in-migration percentage. And a lower number might be expected with the 65 and over group, as fewer people are likely to obtain driver's licenses as they reach retirement age.

The in-migration of the 20 to 29 age group to Arizona at a rate 1.7 times its existing proportion of the population gives a clear picture why out-of-state driver's license surrenders remained level the past two years. And this makes sense in the context of a weakening economy and declining home prices. Because the 20-29 age group traditionally has a lower home ownership rate than the overall adult population this might account for why a drop in home values nationally may not have limited in-migration of this age group.² In addition, the 20-29 age group is less established in the job market and would be less constrained in moving to the state without having a job or leaving an existing job. Given that the 40 and over and 65 and over age groups migrated to Arizona at a slower pace than their existing populations in the state, without strong in-migration numbers from the 20-29 age group, out-of-state license surrenders, and thus in-migration, would have fallen off the past two years, in particular 2008.
Monthly Arizona MVD license surrender data are available on the Arizona Workforce Informer Web site at the following link: MVD Data Web Page

1) "Estimates of Population and Migration for Michigan: 2000-2008," Library of Michigan / LDD, Department of History, Arts, and Libraries, http://www.michigan.gov/hal/0,1607,7-160-51170-205570--,00.html

2) "Homeownership Rates by Age of Householder and Family Status," 1982-1999, http://www.allcountries.org/uscensus/1213_homeownership_rates_by_age_of_householder.html