Author
The research community at the Institute includes visiting scholars, consultants, economists, research analysts, and research assistants. These scholars bring a diversity of backgrounds, interests, and expertise to research that deepens our understanding of economic opportunity and inclusion as well as policies that work to improve both.
As one of the people overseeing the Real Estate Finance Section at the Fed, Raven Molloy and her team provide inflation-focused policymakers with up-to-the-minute insights on mortgage credit conditions and housing prices.
In her own research, she tracks a slower-moving phenomenon operating in the background: Americans aren’t moving.
In a well-oiled economy, workers should be able to match their skills with the right jobs, wherever those jobs might be. Market incentives should emerge to move people to where the jobs are, while economic pressures drive jobs and people to where housing costs are more affordable.
In the U.S., these people-flows have slowed to a troubling degree. “Long-distance migration rates have been falling for decades,” said Molloy, who sits on the Institute’s System Affiliates Board. Internal migration has plateaued in recent years “at such a low level, you’d think you can’t go much lower.”
Despite the anecdotes of tech workers ditching the Bay Area for Boise, Idaho, recent evidence suggests even a major economic shock like COVID-19 did not widely inspire people to relocate much beyond the suburbs. That echoes Molloy’s findings from the Great Recession.
What does this mean for the economy more generally? “If you don’t have people moving around, that makes it harder to spread shocks across space,” said Molloy, because those economic shocks are concentrated in already-struggling places. This reinforces persistent disparities between vibrant boomtowns and depressed regions—particularly in the Midwest and Deep South. Molloy says it’s important to understand this vast variation in conditions since the Fed’s tools for conducting monetary policy can have different effects on different communities.
The magazine of the opportunity & Inclusive Growth institute
When Molloy and co-authors examined net flows in migration prior to the pandemic, the results were surprising at first. Net migration rates out of struggling cities didn’t look much different than out of strong ones; if anything, on net people seemed to move out of areas with better employment prospects. Housing costs, intuitively, could be another big factor driving people to relocate, but housing supply constraints (which affect housing costs) did not appear to reduce migration flows.
One factor that did seem to matter: distance. Even when they do leave town, “people are much more likely to move close by, like within the same state,” Molloy said. “We have ties to other people, we have ties to the community.” How can policymakers support a vibrant economy and shared prosperity when Americans seem so inclined to stay put? It’s another worthy mystery for Molloy and her team at the Fed.
This article is featured in the Fall 2023 issue of For All, the magazine of the Opportunity & Inclusive Growth Institute
More scholar spotlights from this issue
Jeff Horwich is the senior economics writer for the Minneapolis Fed. He has been an economic journalist with public radio, commissioned examiner for the Consumer Financial Protection Bureau, and director of policy and communications for the Minneapolis Public Housing Authority. He received his master’s degree in applied economics from the University of Minnesota.
