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Understanding Gross Workers Flows Across U.S. States

  • Daniele Coen-Pirani

This paper documents and provides an explanation for the main stylized facts about net and gross workers flows across states in the U.S. While it is generally known that gross flows of population across locations are significantly larger in the United States than within most European countries (see Hassler et al., 2005), there is considerable heterogeneity in gross and net flows across locations within the United States itself. The main purpose of the paper is to test whether a simple general equilibrium search model based on Lucas and Prescott (1974)'s island economy can account for the main stylized facts. The paper builds on work by Blanchard and Katz (1992), who focus only on net, rather than gross, flows of workers and on the partial equilibrium analysis of migration decisions by Kennan and Walker (2005). I start by documenting these facts using the decennial Census of the U.S for the post-WWII period. The latter allows one to determine a respondent's state of residence in the Census year as well as five years before the Census year. This information is used to construct state-level aggregate gross and net flow rates of workers. These flows are adjusted to take into account the different demographic and industrial composition of the workforce across states and differences in other state characteristics, such as size. The key stylized facts are as follows. In the cross-sectional dimension: (1) gross inflow rates are more dispersed than net flow rates, which, in turn, are more dispersed than gross outflow rates. (2) Gross inflow and outflow rates are positively correlated. (3) Gross and net inflow rates are highly positively correlated, while net flow rates and gross outflow rates are uncorrelated. These three facts suggest that reallocation of population within the U.S. occurs mainly through variations in gross inflows (large in fast-growing states and small in slow-growing states), rather than in gross outflows. In other words, states that tend to lose populat

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Paper provided by Carnegie Mellon University, Tepper School of Business in its series GSIA Working Papers with number 2006-E68.

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Handle: RePEc:cmu:gsiawp:-236096759
Contact details of provider: Postal: Tepper School of Business, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, PA 15213-3890
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  1. Damba Lkhagvasuren, 2005. "Big Locational Differences in Unemployment Despite High Labor Mobility," Working Papers 12002, Concordia University, Department of Economics, revised Feb 2012.
  2. David Y. Albouy, 2008. "The Unequal Geographic Burden of Federal Taxation," NBER Working Papers 13995, National Bureau of Economic Research, Inc.
  3. Jovanovic, Boyan & Moffitt, Robert, 1988. "An Estimate Of A Sectoral Model Of Labor Mobility," Working Papers 88-32, C.V. Starr Center for Applied Economics, New York University.
  4. Roc Armenter & Francesc Ortega, 2010. "Credible Redistributive Policies and Migration across US States," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(2), pages 403-423, April.
  5. Rappaport, Jordan, 2004. "Why are population flows so persistent?," Journal of Urban Economics, Elsevier, vol. 56(3), pages 554-580, November.
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  8. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, March.
  9. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-78, December.
  10. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
  11. Kambourov, Gueorgui & Manovskii, Iourii, 2004. "Occupational Mobility and Wage Inequality," IZA Discussion Papers 1189, Institute for the Study of Labor (IZA).
  12. Greenwood, Michael J, 1975. "Research on Internal Migration in the United States: A Survey," Journal of Economic Literature, American Economic Association, vol. 13(2), pages 397-433, June.
  13. Fernando Alvarez & Marcelo Veracierto, 1999. "Labor market policies in an equilibrium search model," Working Paper Series WP-99-10, Federal Reserve Bank of Chicago.
  14. Davis, Steven J. & Haltiwanger, John, 1999. "Gross job flows," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 41, pages 2711-2805 Elsevier.
  15. Antonio Ciccone, 1998. "Agglomeration-effects in Europe," Economics Working Papers 499, Department of Economics and Business, Universitat Pompeu Fabra, revised Aug 1999.
  16. Lucas, Robert Jr. & Prescott, Edward C., 1974. "Equilibrium search and unemployment," Journal of Economic Theory, Elsevier, vol. 7(2), pages 188-209, February.
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