Inter- and intratstate migration has collapsed within the United States over the last 60 years.
This observation has been lurking in the not-completely-the-background of labor economics for 20 years. The best summary of the literature, by Jia et al, came out in the JEL last year. It’s a very useful and relatively complete treatment. I think a lot about migration these days, mostly asking about the determinants of our reservation wage of migration i.e. how much of a wage increase would someone have to offer you to pick up and move to an entirely new community.
If we take the above figure at face value, it would appear the reservation wage of migraton has increased for Americans. Quite a bit, actually. Of course, it is also possible that American’s no longer have to migrate to find a better job or wage, but that seems a hardly universal phenomenon over that last 50 years. Work from home has only had traction for a decade now at best. Labor markets aren’t as concentrated as they perhaps once were, loosening the monopsonistic lid a bit in a lot of markets, but at the same time the labor share of revenues hasn’t increased, in fact it’s decreased on average. So why aren’t people moving? I have some narrow, testable, answers that I am pursuing as research projects, but I also have a broad hypothesis that seems supremely untestable for the moment, sitting as it were in that thinkpiece uncanny valley between narrow research and podcast cheaptalk.
The concept of diminishing returns is an easy intuition to adopt. We all know the first bite of dessert is the best, the last the one most encumbered with regret. Economic growth remains a miracle, but it’s still true that nothing gained at the margin of the modern developed world will ever compete with those first steps out of subsistence. Very nearly every form of household capital and consumption in the modern work is characterized by some amount of diminishing returns, but that doesn’t mean they are diminishing at the same rate.
There are some goods for which there are few, if any substitutes. Demand for these special goods can be quite inelastic – we’re willing to sacrifice a lot to maintain a certain level of consumption. There are also goods that are quite complementary with one another, their value to us increasing as they are bundled together. Complements are powerful, putting together the right mix of consumption is quite literally the recipe for a better life. Complements, however, are often part and parcel to a cautionary tale. If something is a powerful complement to everything else in your life, we might find ourselves saying things like “I can’t live without it.” No amount of wealth in the world can survive being multiplied by zero.
There are few, if any, substitutes for friends, family, and our broader social network. Some goods cannot be consumed alone. If the sociological literature is to be believed, Americans are lonelier than ever. Both our deepest and most casual friendships have diminished in number. Relationships with neighbors are nonexistent, our ties to communities at a premium. That might, at first blush, make it sound like moving should be less costly– why stick around to maintain relationships that you don’t have. But on the other hand, if new relationships are harder to form than previously, then the relationships you already have are worth more than ever, to be protected jealously. Your only friend is, by definition, your best friend. No one wants to move away from their best friend.
Putting it all together, if personal relationships are an inelastic demand good that is complementary with a large chunk of our consumption bundle, then the price, the shadow price, we are willing to pay for it is going to go through the roof in the face of a negative supply shock. In a world where relationships are sudenly at a premium, you will be willing to forego a lot of additional income in order to preserve a small network in which you have a lot of social capital.
In two weeks half the country is going to be watching the Superbowl with a 3 or 4 friends, maybe 10 or 20. Thanks to innovation and economic growth, most people will be watching it on a 55 inch high definititon television with decent food and beverages. What about game would change if the host got a 20% raise? The TV might get a a little bigger, the snacks less fried, the beer more imported. What if the host moved two years ago? Would they have friends close enough to invite over? $15,000 worth of catering is a poor substitute for having someone to high-five.
The more I think about our lives and how little economic pressure, survival pressure, there is to find a 10% higher wage in the modern developed world, I’m surprised anyone migrates at all.
Economist Writing Every Day 
As a migrater, I can say that it’s often easier to make friends with other migraters. There could be a dynamic to model here. When the proportion of migraters drops below a critical mass in a city, then it becomes harder to join in as a newcomer. It all depends on culture, since incumbents can choose to be very welcoming if they want.
LikeLiked by 1 person
The “I already have enough friends” model of insiders freezing outsiders out of their networks seems viable to me, which would result in exactly the phenomenon you are describing. Also, once your network is totally shattered and your social capital is minimal, locals expect you to move away again, so its not worth their time to invest in you.
LikeLike
Agent based modeling will make such a come back with this who-will-I-drink-with paper we are brewing
LikeLiked by 1 person
I wonder if the increasing scope of government assistance plays a role here. Sixty years ago, if your job in your current city went away, you had to move elsewhere to find new work, or else starve. With the general lower standards of living back then, to move your family in with a relative (in your current metro area) was a real imposition. And there was just a lot more pride back then in not being a mooch.
Now, living on assistance whilst crashing in a family member’s basement indefinitely seems like a more accepted way of life. I know various examples. Less need to move to scrap out a living in a distant city.
LikeLike
I’d be careful about like assuming changing pride norms – nostalgia for the past can interfere with any assessment that people were “better” in the past. If I was going to look for a mechanism through government assistance programs, I’d first look for changes in “how” before “how much”. If the mechanism for receipt is more conditional on local or more careful to track, you’d get less migration. Pre-digital records, people use to famously collect on their parents continuing pensions and and assistance checks long afer they died.
LikeLike
I am pushing seventy, so I do have some first-hand experience of norms say fifty years ago. People went to greater lengths to avoid being dependent on “handouts.” And you can even see this attitude in stories written in say the 1930’s. As late as the 1970’s, it was very embarrassing, a statement of failure, to take food stamps, unless you were in a pocket of really deep poverty. Not saying people were “better”, that just was a cultural norm.
Fast forward to say 2009, a lot of people did lose their jobs b/c deep recession, lived on unemployment benefits. Then as those ran benefits ran out, lo and behold, applications for disability ramped up. I personally knew men back then, perfectly healthy*, employable middle aged men, that told me they could make more on disability, and of course have more free time to play, than if they worked. So why get a job? One of them was divorced, but moved back into his ex-wife’s basement and helped with house chores. She was embarrassed, thought it was a bad example for their teen age sons, but he was fat and happy.
I do not think there was this level of easy largesse in say 1960s, or the widespread shamelessness at feasting off it.
*Billboards along the highway told you what lawyers to contact, who worked with certain doctors, to certify, say, an emotional disability. And a great thing about this disability benefit was that as long as you were certified to be unable to work at the type of job you used to work at, you could keep collecting – – you could not be forced to take some lower-level, perhaps less-demanding job that was open.
LikeLike