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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 argue that the fall in migration is due to a decline in the geographic speci city of returns to occupations, together with an increase in workers' ability to learn about other locations before moving there, through information technology and inexpensive travel. These explanations find support in micro data on the distribution of earnings and occupations across space and on rates of repeat migration. Other explanations, including compositional changes, regional changes, and the rise in real incomes, do not fit the data. We develop a model to formalize the geographic-specificity and information mechanisms and show that a calibrated version is consistent with cross-sectional and time-series patterns of migration, occupations, and incomes. Our mechanisms can explain at least one-third and possibly all of the decline in gross migration since 1991.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18507.

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Date of creation: Nov 2012
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Handle: RePEc:nbr:nberwo:18507
Note: EFG LS
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  1. Glaeser, Edward L., 1999. "Learning in Cities," Journal of Urban Economics, Elsevier, vol. 46(2), pages 254-277, September.
  2. 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).
  3. Christian Bayer & Falko Juessen, 2006. "On the Dynamics of Interstate Migration: Migration Costs and Self-Selection," Discussion Papers in Economics 06_03, University of Dortmund, Department of Economics.
  4. 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.
  5. Daniele Coen-Pirani, . "Understanding Gross Workers Flows Across U.S. States," GSIA Working Papers 2006-E68, Carnegie Mellon University, Tepper School of Business.
  6. 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.
  7. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  8. 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.
  9. Mincer, Jacob, 1978. "Family Migration Decisions," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 749-73, October.
  10. Marcelo Veracierto & Jonas Fisher & Morris Davis, 2012. "The Role of Housing in Labor Reallocation," 2012 Meeting Papers 805, Society for Economic Dynamics.
  11. Greg Kaplan & Sam Schulhofer-Wohl, 2011. "Interstate migration has fallen less than you think: consequences of hot deck imputation in the Current Population Survey," Staff Report 458, Federal Reserve Bank of Minneapolis.
  12. Bulent Guler & Fatih Guvenen & Giovanni L. Violante, 2009. "Joint-Search Theory: New Opportunities and New Frictions," NBER Working Papers 15011, National Bureau of Economic Research, Inc.
  13. Lucas, Robert Jr. & Prescott, Edward C., 1974. "Equilibrium search and unemployment," Journal of Economic Theory, Elsevier, vol. 7(2), pages 188-209, February.
  14. 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.
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