Don't Get Around Much Anymore
The continuing downward trend of people relocating for work may be more rooted in employment practices than it is in aging baby boomers, current economic conditions or the rise in home ownership.
By Peter Cappelli
As the Wharton students begin their annual summer migration north to Wall Street, my thoughts turn to an interesting study of geographic mobility in the country as a whole.
Maybe this was true for you as well, but when I was a kid, there were plenty of new kids in school every year, and also plenty who were gone at the end of the year because their families moved. Many of them had fathers who worked in corporations, and they were used to moving. The company would say, "time to go," and the family packed up and went. At the other end of the job spectrum, plenty of families seemed to pull up their stakes and move to a new location where they had a job offer or thought they would be better off.
When my kids were in school, though; I didn't notice that so much with their classmates. I only remember one friend of my kid's whose family relocated during their school years. But that is a sample of one.
It turns out that my experience isn't unique, though, that migration within the United States has been declining since the 1970s, and especially during the 2000s. Picking up and moving to a different state is about half as common now as it was from 1948 to 1971. Even moving within the same state and the same county is down, by about one-third over the same period. According to a National Bureau of Economic Research working paper, all moves are down since 2000, which might not be surprising given how bad job opportunities have been.
Well, the population is aging, and we know that older people are less likely to move. That's true, but it turns out that moving is down for all age groups. Maybe it has something to do with home ownership. We know it's harder to move if you own a house, because you typically have to sell it in order to afford the move, and home ownership has been up over time. That explains some of the decline in movement within states and counties but not across states.
Data since 1999 shows that people who do move are less likely now to say that they moved because of their job.
What's going on here?
There is always a tendency with stories like this to assume it has something to do with the people themselves, a change in character: "People today are less willing to take risks," or something like that. Those stories just don't seem right, especially seeing how desperate people have been since the Great Recession to find jobs. My guess -- but let me be clear that I don't really know -- is that it has something to do with employment practices.
We know, for example, that the type of moves my childhood friends experienced are way down. Big companies no longer have lifetime employment. When they rebalance workforces, they don't pay to relocate people to new locations very often. It is easier now to let people go in the down location and hire new ones in the up location. And they do that a lot.
Jobs for which employees would have been relocated in the past don't account for very many people, though. So other factors have to be at work.
One development has been the rise of long-distance commuting. When a parent decides to take a new job far away, he or she are less likely now to move the family. So the family stays put, and the parent gets on a plane every Sunday night to work in the new location. They are taking jobs in new places, they just aren't moving.
The final development, I think, is that people are less inclined to pick up and move even if there was a job for them elsewhere. One simple reason is that employers are less likely to pay to move a new hire and their possessions to a new location. But I think the bigger reason is just that jobs don't last that long anymore, and everyone knows it. The costs of moving are up-front, and they are big. The benefits of a better job play out over time. If that time doesn't last long, neither do the benefits.
Ask yourself this question: If you were offered a new job in another city where you have no ties or networks, and you suspected that the job would probably not last more than three years (which is a good guess), how much of a raise would they have to give you to get you to move? Remember, you'd likely be trying to find a new job in a place where you don't have any connections when that job ended. I suspect it would be a lot more than most employers are willing to pay.
Assuming all that is true, the decline in mobility makes perfect sense.
Peter Cappelli is the George W. Taylor Professor of Management and director of the Center for Human Resources at The Wharton School. His latest book is Why Good People Can't Get Jobs: The Skills Gap and What Companies Can Do About It.