Dissecting the Decline in Domestic Migration

In the early 1990s,  about three percent of all Americans moved between states each year. That frequency has fallen steadily to half the percentage today. Some observers worry that this trend might be a bad thing, reflecting an ossifying of labor markets that in the past made it possible for households to move from regions with surplus labor to regions with relative labor scarcity. However, new research published by the National Bureau of Economic Research suggests that the trend is actually a positive one.

In “Understanding the Long-Run Decline in Interstate Migration,” Greg Kaplan and Sam Schulhofer-Wohl find two primary explanations for the decline in internal migration. First, the geographic distribution of occupations and industries has become more similar across the country. That means fewer workers are compelled to move to find good jobs — which is surely good news for the workers.

Second, thanks to the Internet, people have far more access to information about the amenities and lifestyles of the places they’re moving to with the result that they are less likely to be disappointed and less likely to pick up and move again to another location. That, too, is good for employees — they waster fewer resources on unrewarding and unfulfilling moves.

Why does this matter to Bacon’s Rebellion? The level of human capital is one of the most important factors influencing economic growth and prosperity. Here at Bacon’s Rebellion headquarters, we spend a lot of time thinking about how to develop human capital through K-12 education, higher ed and workforce training,  how to recruit smart, talented, educated people from other states and regions, and then how to keep them here.

Note the graphs above. They show conclusively that (1) Americans with bachelor’s degrees are far more mobile than Americans with less education, and (2) that the propensity for moving is far higher for recent graduates than for people in mid-life or later.

Two conclusions arise from the data. First, in an era when young people are less likely to move and more likely to stay put, the Return on Investment on educating them improves. It’s one thing to invest in education when young people are likely to move to California, it’s another thing if they’re likely to stay close to home.

Second, the Web, social media and related technologies allow young people to sort out really quickly whether your region is cooltown or dudsville. If you lack the kind of amenities they are looking for — a vibrant arts scene, fun nightlife, a strong bicycle culture, walkable neighborhoods, mass transit, whatever it is — they’ll find out long before they get there. There’s a lot less guesswork for them. And there’s a lot more onus on you to make your region the kind of place where they would like to live.


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