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7/8/2015

Why Have Americans Stopped Moving? - Bloomberg View

J OB S

WhyHaveAmericansStopped
Moving?

MAY28,20148:33AMEDT

ByPeterR.Orszag

aA

Americansaremuchlessmobilethanwethink.Almost70percentofuswhowerebornintheU.S.stillliveinthestateofourbirth,
asonly1.5percentofpopulationmovesacrossstateborders,aratelowereventhanthatofourparents.
Whenwedomove,itismostofteninsearchofanewjob,lessexpensivehousingorawarmerclimateandnot,asisoften
suggested,tofindastatewithlowerornoincometaxes.
Yes,peopledomovefromhightaxstatessuchasNewYorktonoincometaxstatessuchasFlorida.Butthevastmajorityofsuch
migrantsarelowandmoderateincomefamilies,whoarelessaffectedthanmoreaffluentfamiliesarebystateincometaxes,anew
analysisbyMichaelMazerovoftheCenteronBudgetandPolicyPrioritieshasfound.Inanycase,morepeoplemoveawayfrom
Floridatostateswithincometaxes,suchasNorthCarolinaandGeorgia,thangointheoppositedirection.
Arizonaisoneofmanyincometaxstatesthathavebeenexperiencingsignificantnetinmigration.SouthDakotaandAlaskahaveno
incometax,buthavebeenlosingpopulation.Tobesure,thesearesimplecorrelations.Butacademiceffortstoisolatetheimpactof
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7/8/2015

Why Have Americans Stopped Moving? - Bloomberg View

stateincometaxratesonmobilitygenerallyfinditexplainslittleaboutobservedmigrationpatterns.
Whatistheprimarydriver?Oneforce,especiallyforolderpeople,isthesun.Overthepasttwodecades,coldweatherstatessuchas
Ohio,Pennsylvania,NewJerseyandMichiganhavelostasignificantshareofpopulationtosunbeltstates.Asecondmotivatoris
housingpeoplewhomovefromcitiesinCaliforniaorNewYorktothoseinTexasorNorthCarolinatypicallybenefitfrom
substantiallylowerhousingcosts.(Thatreductionisoftenfarlargerthananyincometaxsavings,bytheway.)
Thebiggestdrawofallforsomeoneofworkingage,though,isajob.NearlyathirdofAmericanswhorelocateacrossstatelinessay
theyaremovingfora"newjoborjobtransfer."Andthat,inturn,seemstoexplainwhycrossstatemobilityhasdiminished.
Inthelate1980s,about3percentofAmericansmovedtoanewstateeachyear.NewresearchbyRavenMolloyandChristopher
SmithoftheFederalReserveandAbigailWozniakoftheUniversityofNotreDamelinksthecurrentdeclinetochangesinthelabor
market,ratherthanshiftsinthecostofmovingordemographicforces.
Jobturnoverhasbeendropping,despitethepopularmythtothecontrary.Molloyandcoauthorsfindastronglinkbetweenlessening
interstatemigrationanddownwardtrendsintheshareofworkerswhomovefromjobtojob.Anditappearsthismaybebecause
changingemployersnolongerleadstoasmuchgaininwagesasitoncedid.
Allthisclearlyrevealsthatit'smostlyfutileforstatepolicymakerstoaltertheirincometaxesinhopesofluringpeoplefromother
states.Anditalsoexposeshowmuchwehavetolearnaboutwhat'scausingjobmarkettransitionstoslowdown.Onetroubling
possibilityisthatitmaybeadeclineindynamismintheU.S.economy.Amoreauspiciousexplanationisthatworkersare
increasinglyabletofindanidealemployerearlyintheircareers,sothattheyhavelessneedtoseekajobelsewherelateron.
Untilweknowmoreaboutwhat'sdrivingthedropinjobswitches,wecan'tseewhat'skeepingpeoplefrommovingfromstatetostate
orwhetherweshouldbeworriedaboutit.Foranybrightyoungeconomist,thisshouldbealuringquestion.
ThiscolumndoesnotnecessarilyreflecttheopinionofBloombergView'seditorialboardorBloombergLP,itsownersandinvestors.
Tocontacttheauthoronthisstory:
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7/8/2015

Why Have Americans Stopped Moving? - Bloomberg View

PeterROrszagatporszag3@bloomberg.net
Tocontacttheeditoronthisstory:
MaryDuenwaldatmduenwald@bloomberg.net

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