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Migration in a flattening world

Author

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  • Sam Schulhofer-Wohl

    (Federal Reserve Bank of Minneapolis)

  • Greg Kaplan

    (University of Pennsylvania)

Abstract

The interstate migration rate in the United States has been declining steadily for at least 15 years. We bring together theory and data to explore the sources and implications of this decline. We show that a wide range of long-term demographic changes -- including shifts in the age structure, education levels, and female labor force participation -- account for essentially none of the decrease. Rather, the decrease in migration affects all parts of the population, though it is concentrated among the young and highly educated. These findings rule out many popular theories of the decrease in migration. However, the empirical results fit well with a simple search model in which migration rates change because the world is becoming "flatter," in the sense that the variance in amenities across locations is becoming smaller. If job search is undirected, migration rates rise as the world flattens, because people are closer to being indifferent about where they live and smaller differences in wage offers are needed to justify moving. However, if search is directed, migration rates fall as the world flattens, because people are closer to being indifferent about where they live and hence will not direct their search toward distant locations.

Suggested Citation

  • Sam Schulhofer-Wohl & Greg Kaplan, 2011. "Migration in a flattening world," 2011 Meeting Papers 1236, Society for Economic Dynamics.
  • Handle: RePEc:red:sed011:1236
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    File URL: https://economicdynamics.org/meetpapers/2011/paper_1236.pdf
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    1. 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;Population Association of America (PAA), vol. 49(3), pages 1061-1074, August.
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