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  5. Internal Migration: Patterns, Policy, and Impacts on the Labor Market
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Internal Migration: Patterns, Policy, and Impacts on the Labor Market

Paper Session

Monday, Jan. 4, 2021 3:45 PM - 5:45 PM (EST)

Hosted By: American Economic Association
  • Chair: Jacob Bastian, Rutgers University

The Earned Income Tax Credit and Migrating Out of Rural America

Jacob Bastian
,
Rutgers University
Dan Black
,
University of Chicago

Abstract

The population of rural areas in the United States is older and more male than more urban areas, and this has become even more true in recent decades. In this paper, we investigate whether the Earned Income Tax Credit (EITC) can help explain these trends. Theoretically, the EITC could reduce migration out of rural areas by subsidizing low-paying jobs in rural areas and reducing the incentive to move away for a better job. On the other hand, the EITC could increase migration out of rural areas by relaxing credit constraints that prevent households from migrating. We find that although the EITC reduces overall moving (i.e. housing instability), the EITC also increases migration out of rural areas to more urban areas, with higher wage premiums. These effects are concentrated among younger women, exactly the group that benefits the most from the EITC. If the EITC leads to out-migration among younger women, then the EITC should also affect the composition of rural populations: we test this and find that rural areas in states and years after EITC expansions become relatively more male and older than rural areas with a smaller EITC program. Conversely, we also show that the EITC increases the fraction of younger females in more urban areas.

The Winners and Losers of Immigration: Evidence from Linked Historical Data

Joseph Price
,
Brigham Young University
Christian vom Lehn
,
Brigham Young University
Riley Wilson
,
Brigham Young University

Abstract

Using recent innovations in linking historical U.S. Census data, we study the economic impacts of immigration on natives, including their geographic migration response. We find that the arrival of foreign immigrants significantly increases both native out-migration and in-migration.
Accounting for this selective geographic migration, we find smaller economic impacts of immigration for native workers than previous work, including no positive impact on worker incomes. We present evidence of significant “losers” from increased immigration, namely workers who appear to be displaced by immigrant labor and move out of their local labor market, whereas the workers who remain see significant benefits. We also find that younger and lower-skilled workers are “losers” from increased immigration, whereas older and higher-skilled workers are “winners.”

Local Ties in Spatial Equilibrium

Mike Zabek
,
Federal Reserve Board

Abstract

Someone who lives in an economically depressed place was probably born there. And having workers with local ties – who prefer to live in their birthplaces – leads to smaller migration responses in depressed places. Smaller migration responses lead to lower real incomes and make incomes more volatile, a form of hysteresis. Local ties can also persist for generations. Additionally, subsidies to economically depressed places cause smaller distortions, since few people want to move to depressed places. Finally, subsidies to productive places increase aggregate productivity, since they induce more migration.

The Impact of State Borders on Mobility and Regional Labor Market Adjustments

Riley Wilson
,
Brigham Young University

Abstract

I document a new empirical pattern of internal migration in the US. Namely, that county-to-county migration drops off discretely at state borders. In other words, people are approximately twice as likely to move to a county 20 miles away, but in the same state, than to move to an equally distant county in a different state. This gap remains even among neighboring counties, or counties in the same commuting zone. This pattern is not explained by differences in county characteristics, is not driven by any particular demographic group, and is not explained by pecuniary costs such as changes in state regulation or taxes. However, I find that county-to-county commuting follows a similar pattern as does social connectedness (as measured by the number of Facebook linkages). This would be consistent with people lacking information about opportunities in other states, but also consistent with psychic costs such as the loss of a social network or geographic identify playing a role. Given the role migration plays in equilibrating labor markets after local shocks, this migration friction might have important implications on how labor markets adjust which I explore.
Discussant(s)
John Coglianese
,
Federal Reserve Board
Marco Tabellini
,
Harvard Business School
JEL Classifications
  • J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers
  • R2 - Household Analysis