Internal migration within the United States has witnessed a significant decline, with fewer Americans relocating within the country. A recent working paper by economics professors William Olney and Owen Thompson at Williams College sheds light on this phenomenon, attributing it to various factors, notably the behavior of older homeowners, particularly baby boomers, residing in states with high home prices.
Impact of Expensive Housing Markets
Olney and Thompson’s research highlights that residents of states characterized by high home prices, such as California and New York, exhibit decreased likelihoods of moving due to the prohibitively expensive housing market. Older homeowners, in particular, are identified as key contributors to the diminishing internal migration trends, showing reduced responsiveness to local housing price fluctuations.
Structural Changes in Migration Patterns
The decline in internal migration, spanning several decades, is attributed to structural changes in migration dynamics rather than transient economic conditions. Factors such as deindustrialization and economic fluctuations have contributed to the slowing pace of internal migration since the 1970s, as evidenced by census data.
Regional Migration Trends
Analyzing migration patterns on a regional scale, the researchers note a tendency for individuals to migrate from the Northeast, Midwest, and California to regions in the Northwest, Southeast, and Southwest. States with high wages and housing prices, including California, Illinois, Massachusetts, New Jersey, and New York, experience net outmigration, while states with relatively lower wages and housing costs, such as Georgia, North Carolina, Tennessee, and Texas, attract migrants.
Influence of Wage and Housing Disparities
Utilizing IRS administrative data, the researchers ascertain that wage differentials between regions influence migration patterns, with higher wages attracting individuals from lower-wage areas. Similarly, disparities in housing prices play a significant role, with lower housing costs attracting migrants from more expensive regions. However, the study reveals a declining sensitivity to housing prices in migration decisions over time, particularly among older homeowners.
Demographic Dynamics
The research underscores demographic disparities in migration behavior, with older homeowners exhibiting the least propensity to relocate, driven by factors such as homeownership stability and lower educational attainment. Notably, baby boomers are identified as a cohort contributing significantly to these declining migration trends, with many opting to remain in their homes despite rising property values.
Implications and Future Trends
While the overall national migration rate has declined over the years, driven by various economic and demographic factors, the study highlights a resurgence in long-distance moves amidst a robust job market. However, the prevalence of baby boomers clinging to their homes poses challenges, particularly in addressing housing market dynamics and demographic shifts.
In conclusion, understanding the intricate interplay between economic, demographic, and housing market factors is crucial in comprehending the evolving landscape of internal migration in the United States and its broader societal implications.
Leave a Reply