Understanding the Long-Run Decline in Interstate Migration

65 Pages Posted: 6 Nov 2012

See all articles by Greg Kaplan

Greg Kaplan

University of Chicago - Department of Economics

Greg Kaplan

Princeton University - Department of Economics

Sam Schulhofer-Wohl

Federal Reserve Bank of Chicago

Multiple version iconThere are 2 versions of this paper

Date Written: November 2012

Abstract

We analyze the secular decline in interstate migration in the United States between 1991 and 2011. Gross flows of people across states are about 10 times larger than net flows, yet have declined by around 50 percent over the past 20 years. We argue that the fall in migration is due to a decline in the geographic specificity of returns to occupations, together with an increase in workers' ability to learn about other locations before moving there, through information technology and inexpensive travel. These explanations find support in micro data on the distribution of earnings and occupations across space and on rates of repeat migration. Other explanations, including compositional changes, regional changes, and the rise in real incomes, do not fit the data. We develop a model to formalize the geographic-specificity and information mechanisms and show that a calibrated version is consistent with cross-sectional and time-series patterns of migration, occupations, and incomes. Our mechanisms can explain at least one-third and possibly all of the decline in gross migration since 1991.

Suggested Citation

Kaplan, Greg and Kaplan, Greg and Schulhofer-Wohl, Sam, Understanding the Long-Run Decline in Interstate Migration (November 2012). NBER Working Paper No. w18507. Available at SSRN: https://ssrn.com/abstract=2171617

Greg Kaplan (Contact Author)

University of Chicago - Department of Economics ( email )

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Greg Kaplan

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

Sam Schulhofer-Wohl

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

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