Maybe Americans Aren't Moving Because They Don't Need To (Rise of the City Economy)

Atlantic Cities: Maybe Americans Aren't Moving Because They Don't Need To

The United States has long been a highly mobile population compared to Europe and other OECD countries. (I seem to recall Australia was high as well.) People used to migrate for better economic opportunities, partly because there were such significant differences between locations on wages and opportunties. Matthew O'Brien reports that interstate migration has dropped by half over the last two decades. Why? The regional differences in wages and opportunities are equalizing.

... It's not just jobs that are the same across states. Wages are too. Kaplan and Schulhoffer-Wohl find there's been less variance between states among industry-specific average wages. In other words, there's less reason to move for work. That's even more true when it comes to moving to find out if you want to move, which isn't as tautological as it sounds. Before the age of cheap travel and Facebook, nomadic twentysomethings were more likely to move somewhere to find out if they wanted to live there. That's not to say that doesn't happen now, just not as much -- there are fewer serial movers nowadays.

If people aren't moving for jobs, why are they moving? Well, it has to do with something that is too damn high. As Ryan Avent and Matt Yglesias [Minneapolis Federal Reserve] have pointed out, land zone regulations senselessly restrict housing supply in many big cities, pushing up rents. These higher costs of living often make higher-paying jobs in New York or San Francisco less attractive than slightly lower-paying jobs in the Sun Belt. The more wages converge, the more this will be the case. This is really a story about the rise of cities. The more cities dominate the economy, the more uniform the economy becomes, and the more quality of life rather than job matters. 

 

There is no red state economy or blue state economy, but a city economy.

Comments

[Matt]

Indeed. Vast differences in cost of living remain, especially between West, Northeast and the Midwest (though Chicago's still high). I appreciate how far I can stretch my dollar here in KC.