Out-of-State vs. In-State Migration in the United States

Abstract

Blanchard and Katz, in their paper "Regional Evolutions" (1992), suggest that out-of-state migration is the primary adjustment mechanism by which states recover from employ­ment shocks. Additionally, they acknowledge that there may be externalities associated with out-of-state migration, al­though they do not investigate that conjecture. In response to their findings, this paper examines the economic and demo­ graphic characteristics of out-of-state migrants and concludes that the level of education is significantly associated with the choice to move out-of-state, even when controlling for a number of other demographic and economic variables. These findings imply that there may be negative externalities associ­ated with our-of-state migration in the form of decreased human capital, which can diminish the speed of convergence of growth rates across states (Barro and Sala-i-Martin 1995) and may result in decreased social returns to education (Moretti 1998). While state policymakers must be made aware of the potential for out-of-state migration to adjust for employment shocks, they muse also design policies that protect the state against concurrent loss of human capital during periods that follow employment shocks.