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Understanding the long-run decline in interstate migration

  • Greg Kaplan
  • Sam Schulhofer-Wohl

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 show that micro data rule out many popular explanations for this decline, including aging of the population, the rise of two-earner households, other compositional changes, regional changes, and the rise in real incomes. We argue instead that the fall in migration is due to a decline in the geographic specificity of occupations and an increase in workers’ ability to learn about other locations before moving there, through both information technology and inexpensive travel. We develop a theory to formalize these ideas and show that a plausibly calibrated version is consistent with cross-sectional and time-series patterns of interstate migration, occupations, and incomes.

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Paper provided by Federal Reserve Bank of Minneapolis in its series Working Papers with number 697.

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Date of creation: 2012
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Handle: RePEc:fip:fedmwp:697
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  1. Matthieu Crozet, 2004. "Do migrants follow market potentials? An estimation of a new economic geography model," Journal of Economic Geography, Oxford University Press, vol. 4(4), pages 439-458, August.
  2. Marcelo Veracierto & Jonas Fisher & Morris Davis, 2012. "The Role of Housing in Labor Reallocation," 2012 Meeting Papers 805, Society for Economic Dynamics.
  3. Bayer, Christian & Juessen, Falko, 2008. "On the Dynamics of Interstate Migration: Migration Costs and Self-Selection," IZA Discussion Papers 3330, Institute for the Study of Labor (IZA).
  4. Glaeser, Edward L., 1999. "Learning in Cities," Journal of Urban Economics, Elsevier, vol. 46(2), pages 254-277, September.
  5. Greg Kaplan & Sam Schulhofer-Wohl, 2012. "Interstate Migration Has Fallen Less Than You Think: Consequences of Hot Deck Imputation in the Current Population Survey," Demography, Springer, vol. 49(3), pages 1061-1074, August.
  6. Bulent Guler & Fatih Guvenen & Giovanni L. Violante, 2009. "Joint-search theory: new opportunities and new frictions," Staff Report 426, Federal Reserve Bank of Minneapolis.
  7. Gerald Carlino & Satyajit Chatterjee, 2002. "Employment Deconcentration: A New Perspective on America's Postwar Urban Evolution," Journal of Regional Science, Wiley Blackwell, vol. 42(3), pages 445-475.
  8. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  9. Gordon B. Dahl, 2002. "Mobility and the Return to Education: Testing a Roy Model with Multiple Markets," RCER Working Papers 488, University of Rochester - Center for Economic Research (RCER).
  10. Daniele Coen-Pirani, . "Understanding Gross Workers Flows Across U.S. States," GSIA Working Papers 2006-E68, Carnegie Mellon University, Tepper School of Business.
  11. Steven J. Davis & Jason Faberman & John C. Haltiwanger, 2011. "Labor Market Flows in the Cross Section and Over Time," NBER Working Papers 17294, National Bureau of Economic Research, Inc.
  12. Lucas, Robert Jr. & Prescott, Edward C., 1974. "Equilibrium search and unemployment," Journal of Economic Theory, Elsevier, vol. 7(2), pages 188-209, February.
  13. 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.
  14. Mincer, Jacob, 1978. "Family Migration Decisions," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 749-73, October.
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