Why are Americans moving less? Perhaps they don’t need to.

at 02:54 PM ET, 05/18/2012

Thinking of packing up and moving to another state this year? If so, you’re an outlier. Americans on the whole are becoming increasingly less mobile. In the early 1990s, 3 percent of Americans moved across state lines each year. Today, the rate is half that.


A rare sight. (Getty)
But why is that? Economists have put forward all sorts of possible explanations. Perhaps it’s because America’s aging, and the elderly don’t move as much. Or perhaps it’s because there are more two-earner households around — it’s harder to swap cities when both adults need to sort out their job situations. Perhaps it’s just the recession. Or perhaps high moving costs are to blame.

But a recent paper (pdf) from the Federal Reserve Bank of Minneapolis suggests that none of these theories match the data. (For instance, the decline in migration is most pronounced among the young, not the old.) Instead, argue Greg Kaplan and Sam Schulhofer-Wohl, Americans are moving less because they don’t need to move as much. “Low migration,” they write, “is good news.”

It all comes down to two things. First, the authors write, jobs in the United States are no longer quite as geography-specific as they used to be. Sure, if you want to work in finance, Wall Street is the most lucrative place for you. But for many other jobs, the wage boost that workers get from moving is shrinking. Possibly that’s due to the decline of manufacturing jobs — which are often location-specific — and the rise of the service sector, which is somewhat more uniform. Either way, this could help explain why “job-related moves” have been falling more rapidly than other types of moves.

But there’s another factor at work too, say the authors. It’s much easier nowadays for people to research and visit possible destinations before moving. And that may well be cutting down on pointless moves.

This can happen in a couple of different ways. For one, workers no longer have to move to a new city and then frantically search for a job — it’s become much easier to search beforehand and only move when an opportunity arises. (Nowadays, the authors explain, “most workers who move for job-related reasons do so with a new job already in hand.”) Second, immigrants who arrive in the United States are now more likely to move to a city best suited for them early on — which makes them less likely to move later. This, too, shows up in the numbers: Recent immigrants have become far less likely to move away from their original landing point.

Kaplan and Schulhofer-Wohl say that their theories fit the data better than anything else that’s proposed. And if they’re right, then the fact that Americans aren’t moving around as much anymore isn’t necessarily something to fret about. It means that people are getting better at finding the right city for them — and simply don’t need to bounce around as much.

Related: Why aren’t Americans moving anymore? (This old post discusses a couple of other theories — including how the housing bust appears to have hampered mobility during the current economic slump.)

 
Read what others are saying

    Most Read: Business

    DJIA
    0.59%
    S&P 500
    0.75%
    NASDAQ
    0.75%
     Last Update: 02:51 AM 09/17/2014

    World Markets from      

     

    Other Market Data from      

     

    Key Rates from