Americans Aren’t Moving to Economic Opportunity

November 19, 2018
Employment & Wages

The flow of people from struggling to vital counties is one important mechanism for binding the United States into a common market with roughly similar economic fortunes. This process enhances productivity and wage growth, and can play an important role in cushioning regional shocks.     However, this mechanism has broken down in recent decades. Migration from low-income to high-income places has decreased in tandem with falling economic convergence among states. Workers have also become less likely to move to a new job or to a new state and mobility is less responsive to labor demand conditions than in the past.     Indeed, looking at The Hamilton Project’s Vitality Index—a composite measure of the economic and social well-being of U.S. counties—we find that there is relatively little migration from low-vitality counties to high-vitality counties. From 2015 to 2016, more than half of migration out of bottom-quintile counties was into other counties in the bottom two quintiles, while nearly two thirds of migration out of counties in the top quintile was into other counties in the top two quintiles (table 1).      In aggregate, migration does essentially nothing to bring people from low-vitality counties to high-vitality counties: only 13 percent of those leaving the least successful counties move to the most successful counties.     As we note in The Geography of Prosperity, education is the strongest predictor of vitality, and highly educated individuals are more mobile than their counterparts. This may be surprising given that lower-skilled individuals tend to have less stable housing situations. However, often the moves that low-skill individuals make are intra-county as opposed to the inter-county moves presented here.      On the whole, migration is not closing gaps across places, and inter-county migration does not increase people’s exposure to high-vitality counties.      To better understand how migration matters for individuals, and in particular the intergenerational transmission of opportunities, we use data from the Opportunity Atlas. The data show county average adulthood outcomes for children born in between 1978 and 1983, broken out by parental income. We look at the share of children who remain in one of their childhood commuting zones—a geographic measure of a local labor market that contains economically connected counties—upon reaching adulthood.     Consistent with our previous analysis, the likelihood of leaving the local labor market where a child grew up in, is higher for people who grew up in the upper end of the income distribution (see figure 1). This should not come as a surprise: education, which is highly correlated with parental income, is a causal determinant of migration. However, it is surprising that we find a relatively weak relationship between county vitality and the likelihood of leaving the commuting zone one grew up in. Conditional on family income, migration out of a commuting zone is very slightly lower for children who grew up in a higher-vitality county. This is true for children coming from low- and high-income families. That there is essentially no relationship suggests that high-vitality counties are not systematically retaining or expelling the children born into them.       Geographic mobility has important potential benefits for careers, wages, and economic opportunities. About half of moves in 2017 were for labor market reasons, and both intrastate and interstate moves are associated with higher earnings growth. Through job-switching, mobility can be an important driver of wage growth as workers transition to preferred matches. When workers, especially young workers, explore new options in more-distant locations, the economic payoffs tend to be large and positive.       It is therefore concerning that we see far less migration among children born to lower-income families or from lower to higher-income places. Of course, diminished mobility is often caused by limited means: young adults from low-income families may have less of a family safety net to fall back on in the event of employment setbacks, less information about opportunities in distant locations, or simply fewer resources to fund a move. To the extent that public policy can remove some of these impediments, as well as others that restrict mobility for workers more generally, it would help to extend economic opportunity and enhance both wage and productivity growth. For example, a 2018 Hamilton Project proposal by economist Abigail Wozniak would help low-income students to enroll in colleges and universities when they do not have local access to postsecondary institutions, encouraging geographic mobility by promoting college degree attainment. The proposal would also encourage mobility after graduation, helping graduates to find better employment matches in a wider variety of places.     But it is important to recognize that many people will not leave struggling places, and policymakers should consider options that would help those places to flourish. The Hamilton Project recently released the book, Place-Based Policies for Shared Economic Growth, consisting of a range of policies that would promote more broadly shared growth across the country.