Over the past several years, policymakers and business leaders throughout New England have expressed concern regarding the region’s ability to attract and retain skilled workers, given the economic climate of the region compared with other parts of the nation. Indeed, net domestic migration for New England became increasingly negative after the 2001 recession, as the number of people leaving the region exceeded those entering.
Examining the factors underlying these migration trends is important for determining what role, if any, public policy might play in addressing their potential impact on the region’s labor supply. Using a logistic migration model, this paper examines the relative role of economic factors—namely labor market conditions, per capita incomes, and housing affordability—in determining domestic state-to-state migration flows. Using such flows from the Internal Revenue Service for each of the 48 states in the continental United States from 1977 through 2006, the model controls for demographic characteristics of origin states as well as state-specific fixed amenities, such as climate, culture, and natural features.
The model’s estimates show that while all three measures of relative economic conditions are significant determinants of migration, the magnitude of their impact varies. The estimates also show that the impact of these economic factors on state-to-state migration flows has changed considerably over time. For example, the importance of per capita income as a determining factor has fallen considerably since the late 1970s, while that of housing affordability has risen.
Forecasts of net domestic migration based on the model show that while New England will continue to lose individuals to other states during 2009, the pace of out-migration will likely slow, particularly in Massachusetts. This is likely due to the fact that both the region and the Bay State are performing slightly better than the nation as a whole during the current recession. However, this trend may reverse itself if economic conditions deteriorate in the New England states relative to other parts of the country.
“Voting with Their Feet? Local Economic Conditions and State Migration Patterns,” Regional Science and Urban Economics, vol. 40, issue 2-3, pp. 122-135 (2010).
Are American Homeowners Locked into Their Houses? The Impact of Housing Market Conditions on State-to-State Migration
by Alicia Sasser Modestino and Julia Dennett
Research Department Working Paper 12-1
Is New England Experiencing
a "Brain Drain"? Facts about Demographic
Change and Young Professionals
by Heather Brome
NEPPC Discussion Paper 07-3
England Migration Trends
by David Agrawal
NEPPC Discussion Paper 06-1
To review other Center research about regional labor market trends and demographics, please visit our research index.
Voting with Their Feet: Relative Economic Conditions and State Migration Patterns
Federal Reserve System Conference on Microeconomics (May 14, 2010)
Voting with Their Feet? High House Prices and Migration in New England
Federal Reserve System Committee on Regional Analysis (November 2, 2006)