from the Philadelphia Fed
— this post authored by Kyle Mangum
The modern world moves fast, as the cliché goes, but in the U.S. today, people move less frequently than their parents did a generation ago. The decline in mobility is much more than an academic curiosity.
Economists widely view labor mobility as the principal mechanism by which regions adjust to local economic shocks. If local industries fall on hard times, workers can leave; in places where labor demand is high, new residents flow in. The decline has therefore generated concern that the economy is less adaptable to local shocks, ultimately resulting in labor misallocation, unrealized output, and lower productivity.
More broadly, the decline runs counter to widely held notions of American culture. The U.S. is a nation of immigrants and pioneers, always on the move in search of better opportunities. Paradoxically, in a time of easy transportation and information access, this nation of pioneers has parked its wagons.
Before we identify a proper policy response, we need to understand why mobility has declined. But to do that, we need to consider the history of population expansion across the North American continent. Since European settlers landed on the East Coast, the population of the U.S. has spread to the West and South. This trend continued well into the 20th century, when sparsely populated outpost towns in places such as California, Florida, and Arizona burgeoned into the major metropolitan areas known today.
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