Not Moving to Opportunity

by on March 19, 2016 at 7:28 am in Economics | Permalink

InterstateMigrationLabor market mobility in the United States has declined. Interstate migration is down (graph at right from Molloy, Smith, Trezzi and Wozniak) and so is in-state-migration, especially for the less well educated. Where once people responded to shocks by moving to opportunity now they are likely to stay put and retire early or take-up disability insurance. Ben Leubsdorf at the WSJ reviews some of the evidence:

“A state typically returns to normal after an adverse shock not because employment picks up, but because workers leave the state,” economists Olivier Blanchard and Lawrence Katz wrote in a 1992 paper.

This time might be different in some ways. Three economists wrote in a National Bureau of Economic Research working paper last year that compared with the prerecession years, mass layoffs after 2007 prompted a “muted” migration response and many workers instead dropped out of the labor force.

In a new paper, also cited by Leubsdorf, Danny Yagan at Berkeley suggests that reduced migration is only part of the problem. What has made the aftermath to the 2008-2009 recession so bad is that migration is low at the same time that it has become more necessary than ever. The 2008-2009 recession was especially localized, it hit some places harder than others and in a way that appears to be permanent. But migration has been too slow to solve the problem.

The usual story is that in-and-out migration equalizes wage, unemployment and employment rates across the nation. Some places may be harder hit than others but movement quickly makes the US into one labor market. In the aftermath of this recession, however, that isn’t happening for employment rates. Using a clever research design that looks at workers with similar education and skills doing the same jobs at the same large firms but in different locations, Yagan finds that location continues to matter years after the recession has ended. Workers who worked in the places hardest hit in the 2007-2009 recession have employment rates today that are 1% lower than similar workers in regions that were less hard hit. Convergence has been unusually slow:

I conclude that living in a hard-hit area has caused enduring joblessness and exacerbated inequality. If the latest convergence speed continues, employment differences across the United States are estimated to return to normal in the 2020s—more than a decade after the great recession.

1 rayward March 19, 2016 at 7:47 am

Of course, Trump is promising to bring back all of those manufacturing jobs that were shifted to China, so why should someone in Michigan move to Texas. More seriously, this recession hit housing hard, and anyone owning a house in a place like Michigan couldn’t sell the house (which was likely underwater) so the family could move to Texas and start fresh. Should the government have done more with housing and housing debt in order to facilitate more migration? My paternal grandmother’s family (parents, children, cousins) moved around one hundred years ago (after being in the same place over one hundred years) because of recurring drought and the boll weevil. Thank God!

2 The Engineer March 19, 2016 at 8:38 am

What about the “walking away” phenomenon? Two people on my street abandoned their houses during the great recession. Just walked away, didn’t even turn the keys into the bank.

3 Jan March 19, 2016 at 10:46 am

What you describe happened to a relative of mine in SE Michigan. Had a decent house in the suburbs she had bought 10 years before and had a very reasonable mortgage given her income. Then she got laid off and of course couldn’t sell the house. After 6 months unemployed she ended up finding an ok job not too far away, but at only about 60% of her old salary. The bank wouldn’t renegotiate the mortgage, so she had to walk away and move to a cheaper rental nearby. She simply couldn’t afford the house at its old value, but she could have afforded a mortgage on her house at its recession value and interest rates. Also she ended up filing for bankruptcy, which will making buying anything else in any part of the country and even doing some kinds of jobs very difficult for years to come.

That home ownership tail risk thing became a reality for so many people, and not necessarily folks with poor judgment.

4 Viking March 19, 2016 at 4:07 pm

Hi Jan, renting out the house or getting a roommate was not an option in Michigan?

5 Jan March 19, 2016 at 5:49 pm

Ha, no. Renting out the house would have brought nothing close to enough to cover the mortgage. And middle to upper end housing was in such great supply with so little demand that nobody was “looking for a roommate”. Total buyer’s market. She actually did advertise on Craigslist and in the classifieds for one semi-local college about 20 minutes away. Apparently no responses at all. This was either late 09 or 10, so not even the height of the recession.

6 Brett March 19, 2016 at 1:48 pm

It’s very bad for your credit score, IIRC.

7 Bill March 19, 2016 at 9:46 am
8 Texan March 19, 2016 at 10:20 am

What an awful article. Attacking Texas for having a low share of people covered by health insurance is just another way of saying that Texas has a large population of illegal immigrants (who are ineligible for government health coverage). The same is true for the statistic about adults who have graduated high school.

The points about reliance on oil are well taken and mostly true, and it will be interesting to see how badly the recent drop in oil prices effects the state. The other parts of the article neglect cost of living. As our host notes:

“On the flip side, Texas has a higher per capita income than California, adjusted for cost of living, and nearly catches up with New York by the same measure. Once you factor in state and local taxes, Texas pulls ahead of New York–by a wide margin. The website MoneyRates ranks states on the basis of average income, adjusting for tax rates and cost of living; once those factors are accounted for, Texas has the third highest average income (after Virginia and Washington State), while New York ranks 36th.”

More at:,33009,2154995-1,00.html

9 Bill March 19, 2016 at 10:48 am
10 Zack March 19, 2016 at 7:19 pm

The current unemployment rate in Texas is 4.5% and the labor force participation rate is above the national average. In 2000, the median household income in Texas was about $4000 below the national median. In 2014, it was slightly above, even before adjusting for purchasing power. If this is what happens when an economy crashes, we should all be so lucky.

11 Bill March 19, 2016 at 10:51 am

Texan, you cite a 2013 article by Tyler Cowen.

12 Jan March 19, 2016 at 10:53 am

But if this is driven by the share of illegal immigrants, California should have about the same level of uninsurance, right?

I believe the claim about income adjusted for cost of living. I recognize some people really like living in Texas, but I’d expect that most people believe California is just nicer for the usual obvious reasons.

13 John Thacker March 19, 2016 at 5:33 pm

According to the Census Bureau alternative measure of poverty that takes into account standard of living, Texas has below average poverty and California the highest poverty rate in the US. It’s possible that natural features are responsible for some of the cost of living and should be treated as positive consumption, but a lot of it is just housing supply restrictions.

14 mulp March 20, 2016 at 1:10 am

Poor and working poor are are all illegal?

California has population of 39 million, with 10% uninsured, or about 4 million uninsured, according to

Texas is 27 million, with 17% uninsured, or about 4.6 million uninsured.


The unauthorized immigrant population of California is 2.45 million, of Texas is 1.65 million.

Why does Texas have more uninsured with fewer illegals than California?

Simple, it’s public policy in Texas to ration health care by income and wealth.

And that means immigrants who are US citizens who move to Texas from California will lose any health insurance unless their new employer provides health benefits, or they are wealthy enough to buy insurance, or they get Medicare or VA or military benefits.

15 John Thacker March 20, 2016 at 9:35 am

Why does Texas have more uninsured with fewer illegals than California?

Simple, it’s public policy in Texas to ration health care by income and wealth.

It’s also California policy to provide many people with Medicaid, at the cost of very low quality Medicaid due to extremely low provider payments. California has one of the lowest ratio of Medicaid-to-Medicare payment ratios in the country (New Jersey and Rhode Island are worse), resulting in many more doctors refusing to take Medicaid than in other states.

Since Medicaid money is set via formula and largely provided by the federal government (with much of the state spending being requirements for matching funding by the feds), states’ biggest decision is on how to allocate the funds. In general, there is a tradeoff between covering more people less well, and covering fewer poor better.

Now, all of that was true prior to the recent Medicaid expansion, which provided additional money (supposedly temporarily) to states that expanded their eligibility. Some states had had expanded eligibility prior to the PPACA. The extra federal funding has narrowed the gap for those states. Note that for the states that had not expanded eligibility, accepting the funds was much more expensive than the others, or else they would have to sharply cut payments. The PPACA definitely put a thumb on the scale in favor of worse insurance for more working poor instead of better insurance for the very poor.

16 AIG March 19, 2016 at 6:55 pm

Haters gonna hate. Texas Number 1!

17 rayward March 19, 2016 at 11:37 am

Every American family has moved – even native Americans moved (against their will in some cases). And a place of opportunity today may not be tomorrow – from droughts and boll weevils to rising tides. Americans better get used to moving, because many coastal areas will be uninhabitable in not too many years. Should the government provide assistance for families to leave the coastal ares? Should the government have provided assistance for families to leave Michigan? Should the government have provided assistance for my family to leave when drought and the boll weevil drove them out? My family didn’t move to Texas or Michigan but ended up in a place of their choosing, for which I am grateful. If the government provides assistance, should the government also decide where to move?

18 Thiago Ribeiro March 19, 2016 at 9:18 pm

People are not animals one can herd at will. We are human beings, we have inherent dignity.

19 Peter Schaeffer March 19, 2016 at 12:01 pm


This is actually very easy to understand. There is little or no point in migrating (these days) because of Open Borders. Back in the 1930s, the Okies migrated to California for jobs. Why? Because, back then the U.S. enforced its immigration laws. Now the low-end jobs that migrants might want/need/take are all going to immigrants (legal and illegal). See “All Employment Growth Since 2000 Went to Immigrants” for the grim facts. Quote

“Government data show that since 2000 all of the net gain in the number of working-age (16 to 65) people holding a job has gone to immigrants (legal and illegal). This is remarkable given that native-born Americans accounted for two-thirds of the growth in the total working-age population. Though there has been some recovery from the Great Recession, there were still fewer working-age natives holding a job in the first quarter of 2014 than in 2000, while the number of immigrants with a job was 5.7 million above the 2000 level.”

We can have Open Borders or we can have the American Dream. We can not have both.

20 Nathan W March 19, 2016 at 12:24 pm

This is relevant, but you seem to be assuming that people only migrate for low end jobs, which is not the case. In fact, I would think that people would generally be most willing to migrate for higher end jobs, which immigrants, especially the illegal ones you seem most concerend about, do not compete for. The picture is far more complex than you propose.

The economic side of concerns about Open Borders, including the unlikelihood that a social safety net could be strong under such a situation, seems quite relevant. But, why not set our sights on a Global Dream instead of just an American Dream. Americans, for example, already have much access to the Global Dream, due to the fact that barriers to their employment globally are comparatively low.

Looking at aggregate numbers it seems that America has offered better-than-reciprocal treatment to other countries, but on paper and in fact of how much more difficult it can be to get into the States, I’m not convinced that there is in fact full reciprocity. Among other things, newcomers face a great diversity of additional regulatory barriers (e.g., professional licensing) whereas these barrires are less relevant the other way around. (This doesn’t really apply to the less educated, however.)

21 mulp March 20, 2016 at 1:36 am

Borders north and south were far more open in 1960 than the are today, and more open in 1920 than in 1960, and more open in 1880 than in 1920.

I grew up when the issue with Mexican migrant workers was their exploitation, not them taking anyone’s jobs which few US citizens wanted because they got higher paying easier jobs, or they did the same hard work on their own land.

Moving between the US and Canada and Mexico when I grew up was as easy as moving between NY and Texas.

But then in changing the nationality quotas that gave outsized preference to North European over Southern, Eastern Europeans and Asians and Africans, rather than simply remove or lift the limits, reduced limits were imposed on all immigrant groups including those with no limits, in order to raise limits for a select few. Immigration within the Americas suddenly had quotas.

Except for Cuba.

And now, the fear of unlimited numbers of Cubans flying to Miami to get green cards is driving a change in law to impose quotas on Cubans. And that is driving Cubans to fly to SA and then get to the Mexican Texas border to cross, often using the same human traffickers to get into and through Mexivo.

22 Nathan W March 20, 2016 at 3:14 am

It is very disappointing about the entirely fraudulent narrative that the 9-11 bombers came through Canada was used to whip up support for various expanded border controls. It was definitely a more open border 20 years ago, with virtually no demonstrated rational to tighten things up.

Irrational fear based on misleading or outright fradulent misrepresentation of reality wins again. But don’t let any of that get in the way of expanded budgets for security agencies.

23 Steve Sailer March 19, 2016 at 7:59 pm

It shouldn’t be so hard for economists to recognize that for employers, international immigration is a substitute for internal migration. Why raise compensation high enough to induce Americans to move to the latest hotspot when foreigners will come here and work for less?

An exception-to-the-rule example is the recent North Dakota energy boom, which, due to reasons such as the severe climate and the lack of immigrant networks in North Dakota so far from the Mexican border, was mostly staffed by Americans moving from other cold weather states. The NYT ran a lot of articles about the unseemly high wages that American workers were being paid in North Dakota, like $24 per hour to clerk in a convenience store.

The lack of immigrants in the northern Great Plains is one reason that Raj Chetty’s big study of income mobility over the generations from blue collar parents in 1996-2000 to their kids in 2011-12 showed the best place to have raised your kids in the late 1990s was in rural North Central counties:

24 Dotplot March 20, 2016 at 12:11 am

A huge advantage illegal migrants have over legal migrants is the speed of hiring and training. Most jobs these days seem to include long and expensive hiring and training processes, whereas illegal hiring happens at speed in Home Depot parking lots, often without a common language

25 Dotplot March 20, 2016 at 12:15 am

moving may be more difficult when even successful applications take a long time to bear fruit, whereas rent comes due on cue

26 Nathan W March 20, 2016 at 3:17 am

Dotplot – in my experience, service sector and labouring employers tend to be sympathetic to the “I just moved to town and I need to pay rent next month. You can trust that I will work VERY hard … Hey, what LOVELY place you have, it would be a pleasure to work here.” sort of introduction, so long as you don’t come across too pathetic. It’s damned risky though.

27 jonfraz March 21, 2016 at 3:40 pm

This isn’t 1933. You do not have to move to apply for a job in parts distant. You can do online. I’ve found three jobs in other areas that way, and moved after getting the job offer.

28 mulp March 20, 2016 at 1:52 am

So, American employers fly to slums and rural areas of foriegn countries to recruit workers, telling them to spend thousands to be human trafficked in the US because that’s cheaper than putting listing in job boards in other States telling people to hire a human trafficker to move them from Philly or Camden to Texas?

Or is your point that US citizens getting a bus ticket to Texas makes them bad worker prospects because they have no family back in NJ or PA who will be killed if they don’t take any job no matter how bad and illegally they are treated?

That an illegal will have to crawl inside a running machine to unjam it when you say so, while a US citizen will call OSHA and then draw unemployment when you fire him, based on the firing being illegal using the OSHA complaint?

29 Dotplot March 20, 2016 at 6:21 am

all of that, yes, except that I’m not sure remote price signals need face-to-face delivery by specific firms. hopefully lots of them have friends stateside

sorry if I seemed to say that illegal immigrant workers have things easier, on balance. I want to say that sluggish hiring may reduce worker mobility at the margin, and use illegal immigrant workers as an example as I speculate that hiring need not b so sluggish (tho I do want to keep out of the running machine)

30 DRDR March 19, 2016 at 7:50 am

There is evidence though that in-migration to affected areas fell even if out migration had been flat, see

31 DJF March 19, 2016 at 7:50 am

“”””What has made the aftermath to the 2008-2009 recession so bad is that migration is low at the same time that it has become more necessary than ever “””””

So we bailed out the bankers which meant that their assets were not sold off cheap so that means home prices stayed higher then it should be which means that people with little wealth could not move into the now cheap RE which reduced their ability to move

32 prior_test2 March 19, 2016 at 8:25 am

Mission accomplished again, right?

33 Joe March 19, 2016 at 7:54 am

Maybe if immigration were lower there’d be more opportunities for those already in the country and they’d be willing to risk a move.

34 AIG March 19, 2016 at 6:58 pm

Maybe if my aunt had a d***, she’d be my uncle.

Because prior to evil Mesicans picking up oranges and cleaning up cow s**t, that job was done by fat lazy ignorant Trumpians from Ohio, right?

35 Derek March 19, 2016 at 9:12 pm

I see you are eager to be first against the wall come the revolution.

36 bjk March 19, 2016 at 7:56 am

Move to where the immigrants are so you can compete at the new, lower wage level.

37 John Thacker March 19, 2016 at 8:36 am

Except that the places to which they’re not moving have higher wages than their current location, and in many cases than their old wages. The problem more is that many of those locations have more expensive housing (the exceptions like TX or NC are exactly places to which people are moving.)

38 The Anti-Gnostic March 19, 2016 at 8:10 am

Moving is disruptive to family and social life. That’s why academic economists strive for tenure.

Also, this hearkens back to Paul Romer and his tech buddies traveling all the way to Honduras to lobby its government to let them buy prime Gulf Coast property. If they’re feeling so civic-minded, surely there are under-served areas in the US interior where they can deploy capital instead of hectoring people to move, move, MOVE. Oh, that’s right. Paul Romer and his buddies and their families are looking for a nice coastal vista to settle down and build homes and not have to move.

Look, I’ve had to follow the work before. But I specifically chose my current field in order to put down roots in one place. My motivation was the experience of my father in corporate sales, having to move every few years.

39 Steve Sailer March 19, 2016 at 8:07 pm

Historian Susan J. Matt’s 2011 book “Homesickenss: An American History” shows how in the 19th Century the downsides of migration in terms of reduced happiness were openly discussed in our culture. But in the 20th Century, adult Americans were expected to maintain a stiff upper lip about their feelings of homesickness. Big organizations like the military and corporations (e.g., Walmart’s store managers) moved their works willy-nilly over the landscape and didn’t look positively on griping.

Eventually, the rise of the two income family gave Americans a trendy reason to resist being dislocated so often by their bosses.

40 Eatonrapidsjoe March 19, 2016 at 8:13 am

I was presented with a “move or lose your job” situation. My thinking at the time was that the firm I was working for was shrinking and I was being told to move from a very low cost of living area to a much higher cost place to live. A company that is shrinking can quickly fall into bankruptcy. Why would I want to find myself in a high housing cost market, stranded with negative equity and no job?

I was lucky. I was able to transfer over to the manufacturing side of the house. My new job was within commuting distance. I was able to pay off my mortgage.

And yes, the company did go bankrupt when I was fifty years old. My house was paid for. I was living in a low cost of living region. The “operations” were transferred to a different entity and I still had a job.

I just wanted to point out that staying in place can be a rational decision.

41 prior_test2 March 19, 2016 at 8:27 am

Prof. Cowen and Prof. Tabarrok, both with tenure at a state supported institution of higher learning, are likely to agree in actions, if not words.

42 comment March 19, 2016 at 8:37 am

This is clearly a long-term trend and reflects the most important change in the workforce over this period: the increasingly equal participation of women in the workforce.

In a two-income household with roughly (*) equal incomes, there is no advantage to moving for better job opportunities when one partner loses their job. Even if the unemployed partner has a definite job in a new city, the employed partner has to give up his/her job in order for the household to move — leaving the household in the same situation (one employed, one unemployed, but with moving expenses and in a new city where they probably have fewer contacts, social safety net). Or the household has to split up — in effect, an involuntary divorce for limited financial gain, due to having to maintain two (one-income) households, shipping kids back and forth, etc.

Stay, move, or split — the household income is roughly halved. Moving works only if the couple moves to an area where the economy is so strong that the trailing partner is also almost certain to find a job fairly quickly (or is a one income household or nearly so). I don’t see how a “moving subsidy” helps much.

In earlier decades, the household would move for the man’s job; a woman didn’t work outside the home or had a much lower paying, part-time job that would not contribute enough to the household income to be worth staying for.

(*) If women earn on average $0.81 /$1.00 then the household income is divided roughly 55%/45%.

43 ladderff March 19, 2016 at 8:56 am

Working as planned, if not as advertised.

44 Mark March 19, 2016 at 10:45 am

Grad students and new PhDs talk about dealing with the two-body problem when looking for jobs. I imagine it’s worse when one member is mid-career at the time of a shock. Anyone with access to the paper know if Joan’s or Tom’s points below were mentioned at all?

45 Nathan W March 19, 2016 at 11:28 am

Very interesting. Definitely had not seen that point before, and it cannot be irrelevant. However, I do not think it would be better, in balance, to return to various (largely informal) barriers to women in the labour market.

46 Derek March 19, 2016 at 12:32 pm

But it will affect labor force dynamics. I suspect it will also eventually change the assumptions and rationales for business location. Places that have a sizeable supply of predominantly female employment will have a supply of available males. So expect health care centers to become manufacturing centers.

47 Nathan W March 19, 2016 at 2:32 pm

Interesting. Hamilton Ontario seems to already sort of fit that. It’s a centre for many types of health services and is one of the few areas which mostly survived modernization and global competition in manufacturing (albeit at much reduced wages). Of the couples I know there, most of them are basically the male in a manufacturing sector job and the female in some form of social services (mostly private sector). And they all have very explicit intentions to stay put for a very long time.

48 Derek March 19, 2016 at 9:32 pm

Yes, and the lower wages aren’t as serious an issue with the other income with reasonable wages and benefits. It is quite common here to see trades where the wife or girlfriend works in health care, and they stay despite the egg and follow of construction work. And where couples who don’t have a stable job for the women are often moving around or less stable relationships. Nothing empirical but an impression.

49 ladderff March 19, 2016 at 1:19 pm

Of course you don’t.


50 Nathan W March 19, 2016 at 2:26 pm

Right. It would be better to lock women up in the kitchens where we can rape them at will and they are not allowed to divorce, and where we can get them locked up in mental institutions if they complain too much about their chores, or in general just whine too much about the whole situation, etc.

I propose running a political campaign on such principles. Because men want subservient women who make them feel superior, because we cannot “be a man” otherwise. I’m sure the electoral prospects will be high. (Might have to take away women’s right to vote first, though.)

51 Sam Haysom March 19, 2016 at 6:12 pm

Says the guy who routinely shills for Sharia law. It’s not even that you are unprincipled you are just so lonely and ignored that you adopt whatever (left-wing natch) principle that lets you bellow on and on and on in argument.

52 Nathan W March 20, 2016 at 3:28 am

Sam, I do not approve of Sharia law. I just don’t think that painting them as monsters is conducive to having the discussions we need to have. For practical purposes, most aspects of sharia law are roughly similar to what things were like in the West just a few generations ago. Among other things, treatment of women, social exclusion for those who leave their religious communities, etc. And, considering people like laderoff, there are stlil those who pine for “the good ol’ days”.

I didn’t think it was constructive to point out that laderoff’s revealed preference appears roughly in line with Sharia, but the point seems worth making now. Since such things are indeed not generally accepted in the West, I think the appropriate communications strategy is different than for those who come from societies where such things basically remain the norm.

53 anton March 19, 2016 at 5:25 pm

I’m actually in this “moving as dual-earners” situation, so I figured I might as well explain my reasoning here… My husband just took a fancy job in another city, and I’m going through the hassle of trying to get my job transferred there. Even though my employer has an office in the new city, it’s still like pulling teeth to get them to accommodate the move, and I’m not sure I’m going to fit in as much there — if they’re looking to fire people, I’d probably be the first to go. And at the same time, I’m not even sure my husband will be able to hack it at his fancy new job, so I kind of feel like there’s a not-insignificant chance that blowing up my career for no good reason.

54 Steve Sailer March 20, 2016 at 8:17 am

My boss in 1986 was a brilliant woman named Beth. She and her husband had met at Carnegie Mellon MBA school in the early 1980s. One of them got a job out of CMU in San Francisco but the other one couldn’t find work there. They eventually moved to Chicago because the town was big enough for both of them to get good jobs, where they were both highly successful.

I think this anecdote illustrates some reasons for “winner-take-all” growth in cities, in which formerly impressive smaller cities like Cincinnati and Milwaukee have taken a beating compared to superstar cities. One reason is that, say, New York or DC or Boston is big enough to employ both husband and wife well, whereas second tier metro areas like St. Louis and Baltimore and Cleveland are often too small to provide top notch jobs to both husband and wife.

In an era of one income families, it made sense to move the family to a medium sized city in response to a good job offer, but if the spouse needs an elite job too, it makes more sense to stay in a superstar metro area like, now, the Bay Area. This contributes to the big getting bigger syndrome among cities.

The most obvious exception to this rule is Austin.

55 John Thacker March 19, 2016 at 8:40 am

Housing certainly plays a role, on both ends. This paper by Peter Ganong and Daniel Shoag on “Why Has Regional Income Convergence in the U.S. Declined?” is also quite relevant. Many of the higher-income places in the country have instituted heavier regulation preventing home construction, driving up housing prices, and preventing migration that occurred in previous decades. People in declining areas may find that their home prices have declined somewhat, but an even larger effect is not being able to afford housing in the hot areas. It’s absolutely terrible public policy the way that selfish (yet supposedly “left-wing” “progressive”) housing restrictions have meant that much of the gains in hot areas have gone to the wealthy owners of land rather than to newcomers.

56 TMC March 19, 2016 at 10:53 am

“that selfish (yet supposedly “left-wing” “progressive”) ”

Not sure what function the ‘yet’ is supposed to perform here.

57 Nathan W March 19, 2016 at 11:30 am

In which sense are housing restrictions associated with progressives? I assume you’re not referring to rent controls …

58 John Thacker March 19, 2016 at 5:38 pm

I suggest reading the following research which shows that as electorates get more liberal in California cities, the cities start limiting housing development. I have seen other scholarly articles with similar results from other countries. I am pleased that many center left friends support more housing, but their views have as much to with reality of their political coalition as all the Trump hating conservative intellectuals have to do with theirs.

59 mulp March 20, 2016 at 3:02 am

Living and working in NH and Mass since 1978, you would have me believe that Mass is the conservative political State and New Hampshire is the far more politically liberal State?

In NH, the debate over zoning has been pretty constant over the past two decades, and everyone agrees that the very restrictive NH zoning is designed to prevent tax hikes. In Mass, the zoning is designed to match infrastructure development and housing and commercial development.

And I have enough family in Maryland to know that the State wide zoning is restrictive of local towns preventing housing and commercial development, creating mixed development along new highway commuter and commercial transport development.

The master plan in Maryland is to co-build and co-locate housing for all classes of workers, facilities for all ages, commercial services for all, public services for all, and provide the required facilities for employers to provide jobs.

NH is the opposite – local plans only to exclude the young and old, families with kids needing schools, anything that requires building better roads, water or sewer, because all those things would require hiking taxes, and hiking taxes or adding new taxes is totally unacceptable.

While I’ve been amazed through the years to see four lane highways built in the middle of nothing, my dad would lay out where the office parks would be, the low income housing, the high end housing, the shopping areas, the medical, the schools. Visiting a year and two later, the fields had become housing and shopping centers. And over a decade, the fields on two lane roads were not densely developed along 4-6 lane roads.

In NH, housing would show up in fallow fields and orchards, but the roads would remain country roads, and become extremely congested. Town meetings and other public meetings got into fights over fixing all sorts of problems from inadequate facilities vs cutting services to cut taxes. In my town, the very old library got authority for a building fund with a small annual contribution, plus supporters ran fund raisers, chasing rising construction costs. Then when the fund got near being able to build, conservatives pushed through tax cuts which required raiding the building fund. Which was of course a one time deal, so taxes just jumped back up, plus some because of a bad winter and the plowing fund being raided to cut taxes.

The town establishment has learned that new housing must have great roads built by the developer, no drainage or flooding problems, either pay lots in property taxes or be too small for kids to be raised. By picking wealthy new home buyers, lots of open land needs to be maintained to preserve the NH dairy country appearance, so money is allocated to match conservation group spending to buy old farms that have reverted to expand public “open space”.

So, I guess being opposed to taxes defines a liberal, and being willing to pay lots of taxes to support everyone in the family in all their economic needs, including housing, must be conservative??

60 John Thacker March 20, 2016 at 9:39 am

Living and working in NH and Mass since 1978, you would have me believe that Mass is the conservative political State and New Hampshire is the far more politically liberal State?

No, Massachusetts has more restrictive zoning than NH, but in general all of the Northeast has more restrictive zoning than the Southeast and South. The Peter Ganong and Daniel Shoag paper, along with all the works of Ed Glaeser at Harvard, are worth reading for seeing this.

61 John Thacker March 20, 2016 at 9:50 am

Let’s not confuse derivatives with the current level. Massachusetts has had slower population growth than New Hampshire for decades, thanks partially to restrictions on housing supply (as MA has always been wealthy and high wage). It’s possible that the recent trends you speak of have reversed that in the last few years, as some Census data suggests that. The politics tides could always turn; perhaps people in MA realized that their excessive housing supply restrictions were causing problems, and perhaps the relaxed housing supply restrictions in NH caused backlash.

62 spencer March 21, 2016 at 11:06 am

I’ve lived in Mass since 1974 and my observation is that Mass is very good at creating very high paying education intensive jobs and very poor service jobs but very poor at creating middle class jobs.

I suspect that many of the problems in Mass blamed on zoning, taxes, etc that are frequently blamed are really due to this difference in job creation.

Mass is the first post-industrial economy and is just facing the problems before the other parts of the country.

63 Nathan W March 20, 2016 at 3:36 am

Interesting. I can’t access the full paper, so I’m not sure about the methods, etc. I’m quite willing to give the benefit of the doubt, but plausible alternative explanations such as … cities with growing share of liberals are attracting fewer residents on average. Also, the possibility that “liberal cities” may tend to be larger ones with less room for growth (San Fran and LA alone would heavily skew the data unless appropriately corrected for in the methodology) compared to smaller “conservative cities” would explain such a result. Lol, maybe it’s because conservatives hate liberals so much that they lobby to restrict new housing after observing an influx of liberals …

Since this research which is probably produced by someone on public sector university payroll is locked behind a paywall, I cannot discount such possibilities. Definitely open to the argument though.

64 John Thacker March 20, 2016 at 9:43 am

cities with growing share of liberals are attracting fewer residents on average.

It’s unfortunately difficult to tease this out because “attracting fewer residents on average” can be because you’ve restricted supply so greatly that people don’t move in. In the broader picture, I’m not sure how anyone can deny that the larger cities in NC and TX, say, are far more welcoming of people than the larger cities in CA.

As I said, sure, I know plenty of smart center-left liberals opening their eyes to the idea of increasing housing supply. But it’s just not the reality of what their political coalition ends up with; while there are certainly NIMBYs in both parties, conservatives are much more likely to let the developers win, which is good for housing supply and good for the poor.

Increasing housing supply does much more for more of the poor and working poor than inclusionary zoning ever does. So while I certainly will admit that conservatives are much more likely to reject inclusionary zoning (and rent control), those are near useless or even (in the case of rent control) counterproductive tools.

65 Nathan W March 20, 2016 at 10:15 am

“conservatives are much more likely to let the developers win”

Sounds like a very plausible causal mechanism.

66 Steve Sailer March 20, 2016 at 8:22 am

I grew up in the San Fernando Valley near Santa Monica, Beverly Hills, and Malibu. From 1969 onward, it was pretty obvious that “environmentalism” basically meant keeping us flatlanders from the San Fernando Valley from crowding into the even nicer regions on the other side of the Hollywood Hills.

67 Michael McCarthy March 19, 2016 at 11:48 am

I think there is insufficient analysis in this thread of the effects of negative home price appreciation resulting from the financial crisis. Agency mortgage pools of higher LTV (>80) trade at a significant pay-up over TBA because investors price in lower prepayments and turnover (ie. labor mobility) on high LTV loans. This is well documented behavior in the investment industry.

Check out the increase in aggregate LTV documented in this paper

Now even the highest LTV loans originated during the immediate post crisis period (2009-2011 vintage high LTV loans) are curing due to loan amortization and positive HPA. As these locked-in borrowers free up and are able to move it will be interesting to watch their prepayment behavior. Do these LTV cured borrowers have pent up demand for relocation? How will this effect interstate migration and labor mobility? I suspect we’ll see a return to labor mobility levels closer to the mid 90s over the next few years.

68 John Thacker March 19, 2016 at 8:44 am

There are those, like Tim Bartik, who claim that encouraging out-migration carries with it large negative externalities for those left behind (similar to the old “brain drain” argument for immigration), but I have to say that the track record in this period of lower migration looks worse to me, so I’m not sure that these negative externalities really exceed the positive effects.

69 Joan March 19, 2016 at 9:00 am

There are more two income families and the wife’s job is an increasing fraction of the family’s income so if just one loses their job they will be reluctant to move.

70 Tom Warner March 19, 2016 at 10:21 am

And moreover, labor mobility declines with age and career advancement, both in terms of willingness and ability to find a similarly high-ranking and paying job with another company and/or in another place. The 2008 recession was the first in which large numbers of 40+ were laid off in the two-income-family era.

71 Josh March 19, 2016 at 9:16 am

If a permanent feature of your civilization is that a large fraction of the population must leave their communities, families, etc. in order to have a chance at the basics of life, a family, home, some measure of security, it is evidence that YOUR CIVILIZATION DOESNT WORK!

72 ladderff March 19, 2016 at 1:20 pm

Harding I’m starting to find you annoying.

73 Derek March 19, 2016 at 9:54 am

Two years of unemployment insurance. That is exactly what I would predict. After 6 months you may never work again.

74 Tom Warner March 19, 2016 at 10:15 am

Joan’s point is very important, and I wonder if housing cost differentials have widened. That’s the impression I get looking at Waterbury and New Haven.

75 Ray Lopez March 19, 2016 at 11:06 am

You can always move to the Philippines, Thailand, or Africa.

76 anon March 19, 2016 at 11:56 am

Maybe the graph represents everyone getting to California and then staying there.

77 Steve Sailer March 19, 2016 at 8:13 pm

Good point. That’s not insignificant. In my review of Robert D. Putnam’s book “Our Kids: The American Dream in Crisis,” in which the Harvard political scientist compares his generation growing up in a small Ohio city and the current generation in the same city, I wrote:

“One advantage that Midwestern kids of the Putnam / [Charles] Murray generation had over today’s Midwesterners is that they could easily afford to move to California. Back in 1960, when only 16 million people lived in the Golden State, compared to 39 million today, new freeways were bringing cheap suburban land within reasonable commuting range of decent paying factory and office jobs. The California magnet also benefited stay-at-homes by driving up the wages Midwestern employers had to pay to keep their workers from decamping for the West Coast.”

78 jim jones March 19, 2016 at 12:01 pm

If the Government gives you money for doing nothing then you don`t need to move

79 duderino March 19, 2016 at 12:28 pm

How much of an increase in pay would I have to give to the authors of the blog to move to South Dakota? I always get the feeling economists are moralizing the current equilibrium because the poor won’t make choices they also wouldn’t make.

80 Brett March 19, 2016 at 1:45 pm

It’s more of a question why parts of families aren’t migrating as much as they used to. If you look at Chinese workers, or Mexican workers, you have a pattern of folks migrating to other areas to work while leaving families behind to watch over children and receive remittances. If that’s happening en masse in the US with domestic workers from economically disrupted areas, I’m not hearing much about it.

81 BC March 19, 2016 at 1:49 pm

I don’t think that professors in South Dakota make more than those in DC. Probably a better way to state these results is that, when people don’t move for better jobs and higher income, we shouldn’t automatically assume that they are worse off than if they had moved. On the contrary, revealed preference indicates that they are better off. Of course, our understanding of how well off they are, inequality, etc. should reflect that.

82 duderino March 19, 2016 at 2:15 pm

My broader point here is that economists desire for reducing poverty through more efficient workforce behavior is tone deaf from a policy perspective. A much poorer nation migrated south and west for oil and gold in the last century. Today, Efficiency means that West Virginians should leave a $8/hr walmart for a $15.00 walmart in a frigid fracking boomtown.

This also fits into various policy debates over inequality, free trade, and immigration. For those in favor of bigger dose of the current trends, this says to them “If people really hated being poor, they’d abandon their family and move to higher wages.” I’m saying the trade offs aren’t worth the temporary wealth, and other policy adjustments should be considered. And though it isn’t blatant, I sense judgement from tenured professors against people who don’t make that tradeoff.

83 Nathan W March 19, 2016 at 2:40 pm

I don’t think there’s a negative moral judgment implied most of the time, and I don’t see evidence of negative moral judgment in the article referred to. Rather, a widespread lack of ability to comprehend when people don’t behave like the cogs on the capitalist wheel as they are supposed to in economic models. Then again, there are absolutely cases where it comes across as “why are they so dumb?” or “why do these lazy bums not go where the jobs are?”. I think it’s pretty obvious which side of the ideological spectrum such thinking tends to abound in, but in the interest of not revealing myself as a raging Marxist, I will refrain from being explicit.

84 BC March 20, 2016 at 12:06 am

Actually, the side of the ideological spectrum that says poor people are too irrational to make decisions in their own interests and need government to either nudge or outright coerce them is not the Right side. Revealed preference is not a concept that the Left likes to cite.

85 Nathan W March 20, 2016 at 3:50 am

I would have interpreted it as a belief that some people need help, not the requirement for nudges. Consider how the left seems quite comfortable handing out a cheque to the poor and trusting them to do best (even if now always realistic), while, for example, in the case of the USA such supports are only tolerable if they are micromanaged in the form of, for example, food stamps. Left wingers do not support foods stamps and a means of supporting the poor – that is paternalistic.

Can you provide a concrete example of a “left wing paternalistic nudge” which cannot easily be reframed as “actually, that’s just helping them”?

86 Brett March 19, 2016 at 1:43 pm

Homeownership makes moving a lot more difficult in the face of mass economic disruption. You may have some serious equity in your home, or even own it outright – and moving out of an economically depressed area means you’ll have to sell it on short notice and possibly at a loss (or worse, you’ll be underwater if you still have a mortgage). You could send someone ahead to find a job and housing first before selling the home back home and moving out there, but that requires that you have a partner or adult children willing to do that.

All that said, at least some people have moved. Detroit is a lot smaller than it used to be 50 years ago. The people inclined to move have likely already done so, and what’s left are people who are too poor or too attached to move – they’re not going to leave unless you quite literally starve or force them out.

87 Nathan W March 19, 2016 at 2:46 pm

I recall reading some analyses back around 2008-09 which suggested that high home ownership itself may negatively impact the economy for such reasons. It’s a lot easier to pick up and go where the jobs are when you rent. Personally, I would always view home ownership as a chain around my neck. But the American Dream includes your very own house, and alongside having a wife and at least one baby, there are few stronger rites of passage in satisfying the most common view of what we’re supposed to want, and do with life.

Like, on this blog alone, I’ve seen at least a few comments which basically express the view of “only unsuccessful losers don’t own homes”. Whlie it’s rarely so far as that, I think it is extremely commonplace for moderated versions of such thinking to exist within virtually all social circles (especially in Canada and the USA).

88 Sam Haysom March 19, 2016 at 6:09 pm

No one would confuse you for a Marxist- Marxism is nowhere near fashionable enough an ideology for you to preen to. What you are is a underworked, over-aged lonely man far from home without the whimsical sense of self-deception that allows Ray Lopez to cope in similarity dire straights. Never though I’d say this but there are sadder things in live than Walter Mitty’s like Ray Lopez.

89 a Fred March 20, 2016 at 2:52 am


But Ray is mercifully concise and often entertaining or informative.

90 Nathan W March 20, 2016 at 3:57 am

Yes, Sam is the well socialized one.

Maybe one day you will actually introduce a relevant point that I can learn from. That whole bit about the “sang impure” in the French anthem was interesting and all, but a) you were wrong in jumping to conclusions and b) I had to do all the legwork myself.

What is sad is people who are so lacking in genuine self confidence that they need to bully people to feel good about themselves. When I stray into negativity, it’s a calculated decision to get a point across. You’re just calling names, labelling people and boxing them into corners, and generally being offensive. If you have an interest in expanding or otherwise improving your social life, you might want to reflect on this. Chinese are not very curious about issues which are interesting to me, and hence I’m online. Too bad I draw a full-time salary for part time work, and have a lot of time on my hands … lots of time for learning and freelance work – it suits me well.

91 Sam Haysom March 20, 2016 at 5:19 am

That might be the saddest thing I’ve ever read. Inundating this site with tedious content- oftentimes in replies to your own comments suits you.

92 BC March 19, 2016 at 1:45 pm

Two takeaways:

(1) People are not moving despite large income and employment discrepancies and open borders between states. That means open borders do not automatically lead to mass migration, even when income and employment discrepancies are large. Market participants incorporate all sorts of criteria in arriving at an optimal allocation of jobs and housing. To only way to know for sure which allocation is optimal is to open the borders and find out.

(2) Since people consider factors other than income and employment, income or wealth inequality overstate happiness inequality. People that are not moving for higher incomes clearly value other things in their home states. One measure of the value of these other things is the difference in income that would be required to entice these people to move. That difference should be added to the non-moving people’s incomes in any calculation of inequality.

93 Derek March 19, 2016 at 1:48 pm

I thought the difficulty of moving after the housing crash as a driver of unemployment was a borderline trivial result!

94 theprez98 March 19, 2016 at 2:13 pm

Occupational licensing

95 Bryan Willman March 19, 2016 at 6:00 pm

Some hot young PhD (or candidate) should conjur some analysis that asks:
What part of this is due to:
a. Occupational licensing
b. Two income dependency
c. Real estate exposure
d. Social pinning, including such things as in-state resident prices for students in college, etc. etc.
e. Social leanings – does a true blue democrat comfortable in Chicago really feel safe moving to Texas?
f. Various dependent combinations – like “if one member of a couple has a non-transferable occupational license and it’s a two earner household mobility is reduced X%, much greater than for either cause alone”

It can be very hard to separate “revealed preference” from “revealed effect of constraints”

96 Blake March 20, 2016 at 10:56 am

g) being close to friends & relatives one does not live with h) immigrants being more willing to pay the costs needed to live in the most widely desired places i) immigrants being more desired by employers

97 Gilligan April 16, 2016 at 1:04 am

“does a true blue democrat comfortable in Chicago really feel safe moving to Texas?”

God, I hope not.

98 Mayank March 21, 2016 at 8:07 am

I believe sometimes we got to be creating our own opportunities in life. I am doing that only ever since I have joined this incredible business in Forex, it is an absolutely master piece of a business where we can make massive money especially with right setting. I get unless benefits and that’s through OctaFX broker thanks to their brilliant 50% bonus on deposit offer, it is incredible and really helps me out in a great way for creating better money management.

99 BillD March 21, 2016 at 12:32 pm
100 JonFraz March 21, 2016 at 3:31 pm

How many people pack up and start over when they are 50+? That’s mainly a young person thing. Moreover a big change has happened in the workplace over the last generation: seniority has ceased to be meaningful. It used to be that older workers kept their jobs when things got tight and younger workers got pink slips. Now firms prefer to let the older ones go since they are usually better paid. So we are now finding a lot of people out of work with few good prospects (even if they did move) and perhaps with physical problems that could be accommodated except employers have no desire in doing so.

101 Oleditor March 27, 2016 at 1:25 pm

Something I have never understood is why American wage-earners are reluctant to work away from home, at least temporarily, and send their pay back to the family. This is common in many other societies. Years ago, workers who lived in upper Appalachia used to work in the Chicago steel mills, then drive home on the weekends. For the better educated, commuter marriages seem to be on the increase, which is a similar phenomenon. For this to take place, all they need is reliable transportation to the work site. I would see no major problem with a public policy that assures a job at a remote location and penalizes those (by elimination of various benefits) who choose not to do it.

102 Jakee308 April 15, 2016 at 12:12 am

Maybe the housing situation and the automatic down grade for being a non native (I found a lot of prejudice to hire because the company closed and I moved. Could not find work. No one was interested although they advertised for my area of experience regularly.) in today’s HR departments are the problem.

It’s been my experience that HR people hire by using a set of responses. They usually have no personal experience to quiz the prospective applicant so they use psychological questions from college. Plus their experience in the work environment is non-existent as they usually are Liberal Arts Grads and female.

You don’t get to talk to the people you’ll work for and who know the work so you can’t get a foot in by actual experience.

And remember when companies came right out and said they weren’t hiring anyone who’d been let go over 6 months before. There are so many roadblocks up for a intrastate move that it’s a laugh for some people to denigrate those who have not tried to find work elsewhere than their home town.

And with the housing market like it was, it was practically impossible to move if you had property and a mortgage.

Comments on this entry are closed.

Previous post:

Next post: