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Despite a gradual decline in cross-state migration over the years, workers—particularly younger and more educated workers—are still moving from economically suffering regions to find employment in more prosperous areas, suggests a paper discussed at the Brookings Papers on Economic Activity (BPEA) conference on March 27.
In “Should I Stay or Should I Go? The Response of Labor Migration to Economic Shocks,” the authors examine population growth and other labor market indicators (unemployment and labor force participation rates) at three levels: states, commuting zones, and counties. To capture migration flows, they use data based in part on Internal Revenue Service data on address changes.
Overall, Americans are somewhat less likely to relocate to another state. In 2021, about 10 million people (3.1% of the U.S. population) moved to another state, down from about 4% in 1980. But people move for a variety of reasons, including graduation from college, retirement to a warmer climate, or to be closer to relatives. The question the paper examines is whether people are still moving as readily as before in response to regional changes in labor demand.
“Most workers remain in place, even in bad times,” write the authors, Linda Tesar and Christopher L. House of the University of Michigan, Christian Proebsting of KU Leuven in Belgium, and Andrea Foschi of the Bank of Italy. “But our estimates suggest that the elasticity of migration to [economic] shocks has remained fairly constant over time and is as strong as it was in the 1950s.”
Their paper looks at how migration responds over time to positive shocks such as an increase in jobs at contractors when military spending rises and negative shocks such as U.S. factory layoffs after imports from China rose in the early 2000s.
“We find in-migration is more important than out-migration, and cross-state mobility is more important than within-state mobility,” they write.
According to the paper, in the first year after labor demand increases in an area, roughly 80% of the increase in employment comes from lower local unemployment rates with the remaining 20% coming from elevated labor force participation (people who hadn’t been working or looking for a job deciding to enter the labor force) and in-migration. But, after five years, in-migration accounts for roughly 60% of the long-run change in employment.
In-migration is strongest for people in their 20s and early 30s and more pronounced in urban, higher-income and more college-educated counties, according to the paper.
A clear picture of how readily workers relocate in response to labor demand has important implications for policies to support unemployed workers, the authors write.
“If the labor market is fluid and workers can relocate freely, then policy efforts can focus on addressing business cycles at the aggregate level,” they write. “Alternatively, if workers are not able to move from hard-hit locations, place-based policies might be necessary to address regional downturns.”
Authors
CITATION
Andrea Foschi, Christopher L. House, Christian Proebsting, and Linda L. Tesar. 2025. “Should I Stay or Should I Go? The Response of Labor Migration to Economic Shocks.” BPEA Conference Draft, Spring.
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Acknowledgements and disclosures
David Skidmore authored the summary language for this paper. Chris Miller assisted with data visualization.
Foschi’s employer, Bank of Italy, had the right to review this publication but did not influence the findings. The authors did not receive financial support from any firm or person for this article or from any firm or person with a financial or political interest in this article. The authors are not currently an officer, director, or board member of any organization with a financial or political interest in this article.
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