Association for Public Policy Analysis & Management

Young workers are not doing well in the current U.S. economy.  In fact, youth labor market outcomes have declined steadily relative to those of their older peers for over 30 years. Over the same period, variation in labor market conditions across cities has increased, while spatial mobility rates of young people have fallen.  To attempt to reconcile this puzzling combination, we will compare the mobility and economic outcomes of the two cohorts of the National Longitudinal Survey of Youth:  the 1979 (NLSY79) and 1997 (NLSY97). In doing so, we will show whether or not young people tend to move away from lower wage areas with lower employment rates and toward higher wage areas with higher employment rates, and if the rate at which they do so changed between the two cohorts. For movers, we will investigate whether and how the choice of destination has changed over time, as well as measure how long it takes for new arrivals to find a job.  To see if the labor market returns to migration have changed between the 79 and 97 cohorts, we start by applying an estimation strategy used by Kennan and Walker (2011).  Using the NLSY79, they estimate an econometric model of optimal migration, where migration is driven by expected income.  They find that geographic differences in mean wages appear to drive migration decisions, and that those who earn relatively less in their origin area are the most likely to move away.  We will re-estimate their model for the NLSY97, initially focusing on white males with a high school degree (Kennan and Walker’s sample) and expanding to other groups.  The model also provides an estimate of migration costs, which we imagine have changed substantially from the 79 to 97 cohorts and likely are a key driver of the fall in youth mobility. We expect to find that young workers in the NLSY97 move at a lower rate to high wage and employment areas than those in the NLSY79.  We will investigate whether this is due to changes in relative wage gains and/or migration costs, and identify the underlying reasons behind the falling mobility of young workers.  These reasons could include a change in the relationship between mobility and education level, including the influence of college location on destination choice, as well as whether more young workers move back in with their parents now than in the past, and how this relates to local economic conditions, including housing prices.  Our project will make a significant contribution to the knowledge of the relationship between mobility and labor market outcomes for young workers, as well as this relationship’s evolution over the last 30 years.  The economic well being of young people, including their ability to move to areas with better job prospects, is of paramount concern, as they will play a significant role in driving economic growth for decades to come.