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Stranded! How Rising Inequality Suppressed US Migration and Hurt Those Left Behind

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  • Mr. Tamim Bayoumi
  • Jelle Barkema

Abstract

Using bilateral data on migration across US metro areas, we find strong evidence that increasing house price and income inequality has reduced long distance migration, the type most linked to jobs. For those migrating uphill, from a less to a more prosperous location, lower mobility is driven by increasing house price inequlity, as the disincentives from higher house prices dominate the incentives from higher earnings. By contrast, increasing income inequality drives the fall in downhill migration as the disincentives from lower earnings dominate the incentives from lower house prices. The model underlines the plight of those trapped in decaying metro areas—those “left behind”.

Suggested Citation

  • Mr. Tamim Bayoumi & Jelle Barkema, 2019. "Stranded! How Rising Inequality Suppressed US Migration and Hurt Those Left Behind," IMF Working Papers 2019/122, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2019/122
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    2. Ning Jia & Raven Molloy & Christopher Smith & Abigail Wozniak, 2023. "The Economics of Internal Migration: Advances and Policy Questions," Journal of Economic Literature, American Economic Association, vol. 61(1), pages 144-180, March.
    3. Edmond Berisha & Ram Sewak Dubey & John Meszaros & Eric Olson, 2020. "Trends in Economic Inequality: Are U.S. states growing apart?," Economics Bulletin, AccessEcon, vol. 40(2), pages 1319-1331.

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