Disparate Outcomes from U.S. Domestic Migration

22 Pages Posted: 31 Dec 2019

See all articles by Ben Klemens

Ben Klemens

U.S. Department of the Treasury, Office of Tax Analysis (OTA)

Date Written: December 10, 2019

Abstract

Economic models of migration, domestic and international, typically begin with the assumption that a moving household's primary goal is to attain higher income than it would earn by staying. This article uses administrative records for almost all people earning formal market income in the U.S., 2001-2015, totaling about 1.7 billion household observations with 82 million long-distance moves, to develop a detailed match between movers and comparable stayers and thus a comparison of movers' income changes relative to stayers. In aggregate, movers see about a median 1% gain in income after moving relative to the counterfactual of staying, with wide variance. Even a decade later, about two out of five households have lower income relative to staying, with an overall median relative income gain of about 6%. Pecuniary benefits are not evenly distributed: movers leaving school and younger single households without children are likely to see higher income relative to staying, but other movers, most notably single parents, are roughly half as likely to see a relative income gain. The overall story is a bifurcated population of movers. Roughly half move to higher income relative to staying, and the rest do not, indicating for whom the hypothesis of income maximization is difficult to support, and where future research about the many motives for moving may focus.

Keywords: migration, immigration, administrative data, tax analysis

JEL Classification: J61, H24, D19

Suggested Citation

Klemens, Ben, Disparate Outcomes from U.S. Domestic Migration (December 10, 2019). Available at SSRN: https://ssrn.com/abstract=3501886 or http://dx.doi.org/10.2139/ssrn.3501886

Ben Klemens (Contact Author)

U.S. Department of the Treasury, Office of Tax Analysis (OTA) ( email )

1500 Pennsylvania Ave., N.W.
Washington, DC 22203
United States

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