The movement of people into and out of a state can have important implications for the state’s economy. The total net inflow of people to a state matters because it affects the overall supply of workers in the state. Economists predict that growth in the national labor force will slow in coming decades as a result of such factors as the aging of the baby boomers and the decline in the fertility rate. As this happens, the availability of workers is likely to become an increasingly more important factor in the location decisions of firms. ; Migration matters not only for the size of a state’s workforce but also for the composition of the workforce. The spread of computers and advances in information technology have increased the demand for highly educated workers over the last two decades. Most economists expect the demand for such workers to continue growing in response to further advances in technology. But there will also continue to be a need for unskilled workers to perform jobs at the bottom of the job distribution. In deciding where to locate, firms are likely to pay careful attention to the educational composition of a state’s workforce in addition to the size. The most important determinant of the educational composition of the workforce is the quality of the state’s educational institutions. But also important is whether the state is retaining and attracting the kinds of workers in demand by businesses—for example, whether the state is suffering a net gain or net loss of college graduates to the rest of the nation, and whether the state is receiving too large or too small an influx of less educated immigrants from abroad. ; Focusing on the last half century, Keeton and Newton examine overall patterns in total migration and migration by level of education in Tenth District states. They show that the net inflow of people from other states has been consistently positive in only one state, Colorado, but has gradually improved in most other states. In addition, immigration increased greatly in most district states but ended up more important than in the nation only in Colorado. They also show that many district states have experienced both a net loss of college graduates to the rest of the nation and a net gain of people without high school degrees from abroad. The effects of these migration flows on the mix of workers have been greatly outweighed up till now by increases in education in the population at large. Finally, the authors show that in the current decade migration flows have taken a turn for the worse in several states, but this shift was due to temporary changes in relative economic conditions.
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Article provided by Federal Reserve Bank of Kansas City in its journal Economic Review.
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