On December 12, 2019, Fed in Print will introduce its new platform for discovering content. Please direct your questions to Anna Oates
Federal Reserve Bank of New York
Population aging, migration spillovers, and the decline in interstate migration
We investigate the role of the aging of the U.S. population in the decline in interstate migration since the mid-1980s. Using an instrumental variables strategy on cross-state data, we show that an aging workforce causes the migration rates of all age groups in a state to drop. This demonstrates that the effect of aging on migration includes indirect effects that go beyond the direct effect of raising the workforce share of groups with lower migration rates. We then develop an island model in which firms can hire workers either locally or from other locations, and show that an aging population leads firms to recruit more locally. This improves the local job prospects of all workers, which causes migration rates of all age groups to fall, consistent with our empirical findings. Our quantitative analysis suggests that this channel accounts for around half the migration decline, substantially more than what would be predicted solely by the direct effect.
Cite this item
Fatih Karahan & Serena Rhee, Population aging, migration spillovers, and the decline in interstate migration, Federal Reserve Bank of New York, Staff Reports 699, 01 Nov 2014, revised 01 Apr 2017.
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
Keywords: interstate migration; labor mobility; population aging
This item with handle RePEc:fip:fednsr:699
is also listed on EconPapers
For corrections, contact Amy Farber ()