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Is the grass really greener? Migrants' improvements in local labor market conditions and financial health

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  • Stephan D. Whitaker

Abstract

This paper documents several facts about internal migrants in the US that underlie substantial areas of economic research and policy making, but are rarely directly published. Using a large-sample, 23-year panel, the Federal Reserve Bank of New York/Equifax Consumer Credit Panel, I estimate the distribution of changes in local labor market conditions experienced by people who move to a different labor market. Net migration favors local labor markets with lower unemployment and faster job growth, but gross flows toward weaker labor markets are almost as large as the flows toward stronger labor markets. During recessions, net flows temporarily favor weaker labor markets. Migrants frequently choose destinations with similar labor market conditions rather than moving to the markets with the highest growth or lowest unemployment at the time of their move. A hypothesis that personal financial health improves for people moving to tight local labor markets (or deteriorates for migrants to slack labor markets) is only partially supported in the data. Migrants to low-unemployment and high-employment growth regions have higher homeownership rates after they move. However, there are not clear advantages or disadvantages for migrants to strong or weak labor market regions as measured by credit scores, consumption, bankruptcy, or foreclosure.

Suggested Citation

  • Stephan D. Whitaker, 2022. "Is the grass really greener? Migrants' improvements in local labor market conditions and financial health," Working Papers 22-04, Federal Reserve Bank of Cleveland.
    • Handle: RePEc:fip:fedcwq:93758
    DOI: 10.26509/frbc-wp-202204
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    References listed on IDEAS

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    More about this item

    Keywords

    Internal migration; local labor market conditions; unemployment; employment growth; consumer credit; financial health;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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