Monday, December 19, 2016

Americans are Moving Less

Americans are moving less. Here's an illustration from the US Census Bureau. The blue bars show the total number of movers (measured on the left-hand axis), while the red line shows the percentage of Americans who moved (measured on the right-hand axis). Back in the 1940s and 1950s, it wasn't unusual to have 20% of Americans move in a year, but now it's down to about 12%.

Moving in America

The Census Bureau has also released a bunch of statistical tables on the various dimensions of geographic mobility, for those with a need to graze through the data. "Geographical Mobility: 2015 to 2016" focuses on the changes in the last year, while "CPS Historical Migration/Geographic Mobility Tables" offers a longer term view.

For example, one figure shows that between the 2002-3 and 2015-16 measurements, the share of moves that were 50 miles or less rose from 32.3% of all moves to 42.3% of all moves. The main offsetting decline was in moves of between 200 to 499 miles, which fell from 20.7% of all moves back in 2002-3 to 13.8% in 2015-16.

Another shows that Compared with the answers in 1998-1999, a large share of movers say that their reason is to establish their own household, be closer to work, or find cheaper housing. On the other side, a smaller share of movers say that the main reason was to own, rather than rent, or because they wanted a new or better home or apartment

It's hard to know if the decline in labor force mobility is a real problem. The difficulty is that explaining why the fall has occurred has proven difficult, for reasons I've discussed in "Less Migration Within the United States" (August 24, 2011) and "Updates on the US Migration Puzzle" (August 6, 2013).

Basically, the problem is that a lot of the explanations that might seem to make sense don't work very well on closer examination. For example, this trend to lower rates of moving has been going on since the 1980s, so it's clearly not related to a specific recession or recovery. It's also not related to patterns like an aging US population, or rising incomes, or patterns of jobs or homeownership. The decline in moving isn't notably greater after adjusting for these kinds of factors.

One possible explanations is that the US has become more similar across regions, so there is just less motivation to move. Another is that information  has become more available between regions, so people are less likely to move when just looking for work, and instead wait until they have a job in hand before moving.

Other hypothesis are potentially more concerning.  It may be that the the lower rate of moving is because over time the US economy is becoming less flexible and dynamic, in the sense that rates of job creation and destruction are declining, as discussed in Are US Labor Markets Becoming Less Fluid?" (January 9, 2015). A related factor could be that the role of new firms in job creation has been declining, as discussed in "The Decline of US Entrepreneurship" (August 4, 2014). I've heard some arguments that a number of big US cities which used to be magnets for in-migration from the rest of the country have experienced big run-ups in housing prices over time, which makes people less likely to relocate to those areas unless they already have a higher-paying job in hand.

When people move, they don't just change their own situation. They also provide a connection and a trustworthy flow of information back to others at their place of origin, which sometimes leads to additional moves. Sure, it's the 21st century and you can learn all sorts of things about a different location with a web search. But a personal connection to someone who knows you, and your location, as well as the new location, is still a meaningful piece of information.