Mobility in the U.S. is Down. What's More of a Factor: the Housing Slump, or Air-Conditioning?
It’s always been one of the supposed strengths of the American economy: the relative ease with which we’re able to pick up and move. This is particularly useful when times are tough and you need to unhinge from a weak local economy. The thing is, mobility tends to sag during economic downturns. The entire 1930s marked a period of relatively low internal migration, just as the booming post-war decades saw a significant rise.
The conventional wisdom today is that mobility is being dragged down by the housing crisis, that people underwater on their mortgage or reluctant to sell their home into a soft market are choosing to stay put.
But a new study from Notre Dame economist Abigail Wozniak, along with two colleagues at the Federal Reserve, Raven Molloy and Christopher L. Smith, throws some water on that theory by showing that states with high percentages of homeowners with negative equity are no more likely than other states to see a decline in long-distance migration of their residents. The study reviewed 30 years of data and found lifetime migration rates have been trending down since 1980, and that the recent slump in the housing market plays a relatively small role in the decline. The study will be published in the mid-August edition of the Journal of Economic Perspectives. Here’s an earlier version from the Federal Reserve.
Still, mobility remains high in the U.S. compared to other countries. Roughly 1.5 percent of the population moves between two of the four Census regions (Northeast, Midwest, South, and West) annually, and about the same number of individuals (maybe 2.7 percent of the population) move to a different state within the same region.
But why has it declined over the last 30 years? The propensity to migrate falls with age, but rises with education, and is slightly reduced for black, Hispanic, and foreign-born people, as well as for parents with at least one child in the household. But the authors don’t think the 30-year decline has been driven by demographic or socioeconomic trends. While being clear that much more research is needed, they offer a few interesting hypotheses:
One such widespread factor might be a return to equilibrium after a massive population shift toward the South. Some, such as Glaeser and Tobio (2007), have argued that the introduction of air conditioning as well as right-to-work laws combined to make the South a much more attractive place to live, work, and do business relative to the North, boosting aggregate migration in the post–World War II period as families and industry moved South. Migration may have slowed in recent decades as the relative costs and benefits between North and South equalized.
A second possibility is that technological advances have allowed for an expansion of telecommuting and flexible work schedules, reducing the need for workers to move for a job. Indeed, the fraction of workers who report working from home rose from 2.1 percent in the 1980 Census to 4.1 percent in the 2009 American Community Survey. However, this increase seems to be too small to account for the substantial decrease in migration. A third hypothesis is that locations have become less specialized in the types of goods and services produced, making the types of available jobs more similar across space. Carlino and Chatterjee (2002) show that the population has indeed become less concentrated across metropolitan areas in the post–World War II period. They find that the share of urban population and employment in dense metropolitan areas and central cities has fallen while the share of population and employment in less-dense metropolitan areas has risen. A related idea is that the distribution of amenities has become more homogeneous across locations, making residence in any particular city less attractive. Researchers should consider these ideas, as well as other potential explanations, in further work.