Relocation May Soon Be a Thing of the Past
Relocation May Soon Be a Thing of the Past

In a research paper, Understanding the Long-Run Decline in Interstate Migration, Greg Kaplan and Sam Schulhofer-Wohl of the Federal Reserve Bank of Minneapolis analyzed the secular decline in interstate migration in the United States between the early 90s and the early aughts. They found that while gross flows of people across states are about 10 times larger than net flows, they declined by around 50 percent over the study’s 20 year period.

The latest U.S. Census numbers support this decline. According to Richard Florida at CityLab, just slightly more than one in ten Americans (11.2 percent) moved between 2015 and 2016, almost half the 20.2 percent rate back in 1948, when the Census began tracking American mobility. “Mobility was once the cornerstone of the American Dream, but today Americans move less often than Canadians, and only a bit more than Finns or Danes,” he wrote.

Why Mobility Is Falling: The Research Speaks

It’s arguably easier to move out of state now than it was in the past, so why are fewer Americans doing so?  After looking at microdata on the distribution of earnings and occupations across space, the researchers assigned this fall in migration to a decline in the geographic specificity of occupations, together with an increase in workers’ ability, before moving, to learn about other locations and assess how much they will like living there through information technology and inexpensive travel.

In other words, you don’t necessarily have to relocate to Silicon Valley to work in software development, and if you were thinking about such a move, you might decide through online research that it would be dumb to trade a 10 percent salary increase for a 60 percent increase in living costs. So you stay put, whereas before the Internet you would have had less information available, made the move, and potentially regretted it.

In a related CityLab piece from a few years ago, Plumer speculated that today’s economy actually mandates fewer overall changes in jobs and careers, meaning opportunities to move would simply come up less often. And, he wrote, “in our increasingly specialized labor market, people increasingly sort into the places and jobs that best fit them far earlier in their careers. Those who want to be in finance head to New York while they’re still young, just as those who want to be in film head to L.A.” After a while, it becomes prohibitively expensive to leave that geography, so people stay.

Depending on your professions, a move across state lines could actually negatively impact your career. For example, lawyers and doctors are licensed at the state level and might not want to go through the trouble of getting the necessary credentials in a different state, even if the state in question pays better or is experiencing greater demand. Similarly, a high school teacher who moves out of state after working for many years loses both his seniority and his pension eligibility.