By Arnold Kling
If economic productivity – created by low regulations or anything else – was causing the growth of Texas, Arizona and Georgia, then these places should have high per capita productivity and wages. Yet per capita state product in Arizona in 2009 was $35,300, 16 percent less than the national average. Per capita state products was $36,700 in Georgia and $42,500 in Texas.
He argues that population growth in the sunbelt is driven by cost of living factors. In particular, fewer housing regulations serve to lower the cost of housing.
I think that the phenomenon of cost-of-living arbitrage may become increasingly important. People who are in high-wage occupations can choose where they live on the basis of amenities. People who are in low-wage occupations, including what may be an increasing number of people with only sporadic employment, will choose where to live based on cost.
My guess is that as many Baby Boomers retire without adequate savings, a lot of them will be looking for low-cost places to live, including Latin America.