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Why Have Americans Stopped Moving?

Author: Peter R. Orszag
May 28, 2014
Bloomberg.com

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Americans are much less mobile than we think. Almost 70 percent of us who were born in the U.S. still live in the state of our birth, as only 1.5 percent of population moves across state borders, a rate lower even than that of our parents.

When we do move, it is most often in search of a new job, less expensive housing or a warmer climate -- and not, as is often suggested, to find a state with lower or no income taxes.

Yes, people do move from high-tax states such as New York to no-income-tax states such as Florida. But the vast majority of such migrants are low-and moderate-income families, who are less affected than more affluent families are by state income taxes, a new analysis by Michael Mazerov of the Center on Budget and Policy Priorities has found. In any case, more people move away from Florida to states with income taxes, such as North Carolina and Georgia, than go in the opposite direction.

Arizona is one of many income-tax states that have been experiencing significant net in-migration. South Dakota and Alaska have no income tax, but have been losing population. To be sure, these are simple correlations. But academic efforts to isolate the impact of state income-tax rates on mobility generally find it explains little about observed migration patterns

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