March 3, 2016 Reading Time: 2 minutes

Internal migration – Americans moving from one area to another – has fallen significantly over the last three decades, according to my new research brief, released today by the American Institute for Economic Research.

Internal migration refers to moves made within a country, but over a long enough distance to change the economic conditions faced by the migrant. In the brief, I estimate moves made across county and state lines using measures from the Current Population Survey from 1981 to 2015, showing that internal migration has fallen by nearly half during this time period.

One reason this is an interesting economic topic is that it is not clear whether high or low rates of migration are better for the economy. Common sense, confirmed by research, suggests that many people move in an effort to improve their future employment and wage opportunities. So migration may be a good way to ensure efficient sorting of workers to labor markets and enhance productivity.

On the other hand, moving can be expensive, both financially and socially. Some economists suggest that cities in the United States are becoming more interconnected, such that regional differences are lessening and fewer people need to move, which would imply that declining migration is good.

This may be especially true when calculating value beyond productivity to people’s preferences. Moving, of course, is a decision not made always for economic reasons. In the CPS data, about one-third of people moving between states reported moving for what I categorized as “family-related” reasons. This fits with other research I have done, in which I studied individuals who had moved away from their home city and made a second move. In about one-third of those cases, the move was a return home, creating a pattern of “circular migration.”

If people are just searching for the best job, we don’t expect to see so many people to return to a labor market they’ve already left, but this pattern makes a lot of sense for people who are balancing work and family. Some people want to strike out on their own, but many prefer to stay near home. In a previous paper, I show that about half of college graduates and two-thirds of high school graduates make no moves between cities between 18-30, and I estimated that an average young adult is willing to forego over $10,000 per year to live in the same city as his parents. If cities are becoming more similar, then some people who would have had this circular migration pattern a generation ago won’t have to move at all, saving Americans a lot of time, money and energy.

On the way to cities becoming more similar, there still are differences among them; young people going off to college may want to look at our College Destinations Index.

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Patrick Coate, PhD

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