Mobility in the U.S. is Down. What’s More of a Factor: the Housing Slump, or Air-Conditioning?

(Stockbyte)

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.

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  1. Annmaria says:

    I’m one of those telecommuters. I love where I live. When offered a contract I give two prices, one if I telecommmute and I much higher one if I have to work onsite fulltime. No one has yet taken the higher price

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  2. Nosybear says:

    Can it be that some of us are questioning the benefits of mobility? The way to become a recognized expert is to work for a consultant for a while until you find a company that really likes you, work for them for a while, find another consultant willing to hire you…. Maybe some of us are starting to opt for quality of life, of community, of less money and more fulfillment? Maybe we just don’t want to face the repeated inconvenience and financial loss of moving, buying, selling, moving? Maybe we want to acquire some equity or have our kids graduate from one school? I’m a veteran, the endless rounds of move, acclimate, move become exhausting and eventually counterproductive. Maybe this trend is the beginnings of realization that mobility is more a curse than a blessing.

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  3. Marc B says:

    You forgot about employment-linked healthcare! My friends are terrified about moving because of the intermediate time period when they will not have healthcare.

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  4. Skip Montanaro says:

    > 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.

    Wouldn’t the possibility of telecommuting be just as likely to increase mobility? Assuming you
    can afford to live anywhere you want because your job doesn’t tie you to your company’s offices,
    I think some people would take the opportunity to move someplace “nicer”. Or, by definition, do
    telecommuters already live where they want to?

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  5. jonathan says:

    To be clear, the authors note each demographic group saw a decline. This doesn’t mean there can be no socioeconomic reason, just that this reason would need to affect enough groups that we’d see a general decline.

    So for example, we’ve seen over the same period an increase in income inequality. We have more speculation about why that has happened but no specific culprit. China, for example, was not a giant economic power in 1980. But whatever has been causing income inequality may also be causing less mobility. While we think of economic calamity causing mobility – chaos in Europe causing immigration to the US, the Dust Bowl causing immigration westward – it may also cause stagnation and lower mobility. Another example is that a number of studies have examined income mobility – both year to year and generation to generation – and have shown a decline in US mobility. The study addresses physical mobility. These could well be related.

    I find the telecommuting idea particularly silly because that would not affect all demographic groups the same and the authors note all groups show decline in physical mobility.

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  6. vwvagabonds says:

    Two things:

    1. It is more difficult to relocate a dual income family and there are more of them today than 30 years ago.

    2. There is a third category of relocation in addition to those who move outside of their census area and those who move to a new state within their census area. Increasing population densities in metro regions mean that there are more jobs within a given region. Thirty years ago when my father got a new job on the other side of the city he was able to commute to it. Today that commute would be impossible. So, people are moving within their regional areas more frequently’

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    • vwvagabonds.com says:

      Two more things:

      Thirty years ago people were more likely to migrate because they believed the job they were being offered would last a long time. Back then job turnover was measured in years and the idea of lifetime employment persisted.

      Today job turnover is measured in weeks. People are less willing to endure the upheaval to migrate for a job that may not last through the holidays.

      Also, back then when a company offered a job that required migration, along with it they offered a relocation package. Today those are only offered for the most specialized positions.

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    • Enter your name says:

      I think there’s something to the dual-income issue, especially if the incomes are approximately equal. Re-locating a family whose incomes are a highly skilled engineer and a grocery store checker is not as much work as re-locating the engineer and a lawyer or college instructor.

      Also, in a dual-income family, I suspect that the incentive to move is lower: the loss of half the family’s income is not quite the crisis that the loss of all of it is.

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  7. Impossibly Stupid says:

    It’s not just technology, but technology “misapplied”. I would love to be more mobile, but the reality is that the Internet has made the the landscape *so* large that nobody really wants to deal with it all, so paradoxically you get isolationism.

    The example I like to use is this: just now, someone posted your dream job somewhere on craigslist; how do you find it? As mobile as you might *want* to be, you’re essentially limited by the idea that everything is global, yet nobody puts in the kind of effort they used to in order to find those “mobile” opportunities. And often the technology is working *against* us, as are the resulting social norms.

    Similarly, Google *can* lead you to more information on a subject than you would ever have found 30 years ago by spending a day digging for information at the library. But do we now take that day to explore the depth, the wealth of the information that is available to us? No, we just hope that the first page of links is good enough, putting in *maybe* 15 minutes of effort. That, too, is a kind of reduced mobility.

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  8. Dylan says:

    Part of the beauty of America has always been the ability to disappear and start all over what’s the point now when you’re crackhead brother can just track you down on Facebook and continue to makeyour life problematic has any looked at exploding out of state tuitions to attend college why would you leave home to attend college out of state let alone region when there are already diminishing returns on education investment

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