It would seem a reasonable assumption that higher wages would draw young adults to a city or a region. But the vast majority of young people don’t move far from home, and even the offer of more money appears to have a very small impact on their willingness to relocate, a new study by Harvard researchers has found, suggesting that economic planners looking to fight income inequality would do better to relocate better jobs closer to the people who need them.
In their working paper, “The Radius of Opportunity: Evidence from Migration and Local Labor Markets,” Economics Professor Nathaniel Hendren and Ben Sprung-Keyser, a Ph.D. student in the department, utilized U.S. Census Bureau information to study the movement of young adults. Along with Sonya Porter, a principal sociologist and demographer with the Bureau’s Center for Economic Studies, they found that that 80 percent of all young adults at age 26 had moved less than 100 miles from where they grew up, and just 10 percent moved more than 500 miles away. For example, the working paper notes, “children growing up in Dubuque, IA, are three times more likely to move to nearby Des Moines or Waterloo than to Chicago, just slightly further away.”
While higher-wage opportunities could be expected to lure more of those young adults to new territory, the paper found the effect limited. In fact, an increase of $1,600 in annual salary only resulted in a 1 percent uptick.
“Young people don’t move far from their home,” said Hendren, who is also co-director of Opportunity Insights and co-director of Policy Impacts, both Harvard-based nonpartisan, not-for-profit organizations. “They do move in response to higher wages, but we argued that the effects are not that large in general.”
“People certainly respond to changes in wage opportunities, but those people are a fraction of the population, and they still tend to move close by,” said Sprung-Keyser, another co-director of Policy Impacts.
In addition, the study found differences in migration patterns, even within the age demographic. Young Black and Latino adults tended to move shorter distances than young white adults, and they move to different places.
“The most common destinations for Black young adults are Atlanta, Houston, and D.C.,” said Hendren. “The most common destinations for young white adults are the big three cities — New York, Chicago, and L.A. — but also Denver, Colorado, which is not in the top 10 for any other racial group.”
The income level of these young adults’ original families appears to play a major role, even offering what Hendren calls a rare reversal.
“In the data involving young adults from low-income families, we see that Black and Hispanic young adults move a shorter distance than white young adults, even looking within the set of low-income families,” said Hendren. “But when you look at families in the top 1 percent, you actually see a convergence and a bit of a reversal of these race gaps. Black young adults born into the top 1 percent move 30 miles farther on average than white young adults born to people in the top 1 percent.”