Stranded! How Rising Inequality Suppressed Us Migration and Hurt Those Left Behind

34 Pages Posted: 27 Jun 2019

See all articles by Tamim Bayoumi

Tamim Bayoumi

International Monetary Fund (IMF); Centre for Economic Policy Research (CEPR)

Jelle Barkema

International Monetary Fund (IMF)

Date Written: June 2019

Abstract

Using bilateral data on migration across US metro areas, we find strong evidence that increasing house price and income inequality has reduced long distance migration, the type most linked to jobs. For those migrating uphill, from a less to a more prosperous location, lower mobility is driven by increasing house price inequlity, as the disincentives from higher house prices dominate the incentives from higher earnings. By contrast, increasing income inequality drives the fall in downhill migration as the disincentives from lower earnings dominate the incentives from lower house prices. The model underlines the plight of those trapped in decaying metro areas-those 'left behind'.

Keywords: Labor supply, Labor mobility, House price indexes, Labor markets, Housing prices, Migration, Inequality, Economic Opportunity, CBSA, CBSAs, house price, metro area, income difference

JEL Classification: J61, J68, D31, E2, E01, D4, Z13, J3

Suggested Citation

Bayoumi, Tamim and Barkema, Jelle, Stranded! How Rising Inequality Suppressed Us Migration and Hurt Those Left Behind (June 2019). IMF Working Paper No. 19/122. Available at SSRN: https://ssrn.com/abstract=3411031

Tamim Bayoumi (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6333 (Phone)
202-623-4795 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Jelle Barkema

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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