Working Paper: NBER ID: w18507
Authors: Greg Kaplan; Sam Schulhofer-Wohl
Abstract: We analyze the secular decline in interstate migration in the United States between 1991 and 2011. Gross flows of people across states are about 10 times larger than net flows, yet have declined by around 50 percent over the past 20 years. We argue that the fall in migration is due to a decline in the geographic specificity of returns to occupations, together with an increase in workers' ability to learn about other locations before moving there, through information technology and inexpensive travel. These explanations find support in micro data on the distribution of earnings and occupations across space and on rates of repeat migration. Other explanations, including compositional changes, regional changes, and the rise in real incomes, do not fit the data. We develop a model to formalize the geographic-specificity and information mechanisms and show that a calibrated version is consistent with cross-sectional and time-series patterns of migration, occupations, and incomes. Our mechanisms can explain at least one-third and possibly all of the decline in gross migration since 1991.
Keywords: interstate migration; labor market; information technology; economic recovery; geographic specificity
JEL Codes: D83; J11; J24; J61; R12; R23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| decline in geographic specificity of returns to occupations (J62) | decline in interstate migration (R23) |
| increase in information availability about job opportunities and local amenities (R23) | decline in interstate migration (R23) |
| decline in repeat migration rates (J11) | decline in interstate migration (R23) |
| decline in geographic specificity of returns to occupations (J62) | decrease in the necessity for workers to relocate (J69) |
| advances in information technology (L86) | increase in information availability about job opportunities and local amenities (R23) |