Why Americans aren't moving as much as they used to

In several states, like California and Washington, there’s been talk of new, higher, taxes levied on millionaires and billionaires. This has re-ignited that age-old debate: Do wealthy people really flee to tax-friendlier pastures when their taxes go up?

Meanwhile, domestic migration in the U.S. (regardless of wealth) has been declining for decades. But when people do move, where do they go? And why? Is it those high taxes in states like New York and California? Or are there other factors at play?

To help us answer those questions, “Marketplace Morning Report” host Sabri Ben-Achour spoke with William Frey. He’s a demographer and senior fellow at the Brookings Institution. The following is an edited transcript of their conversation.

Sabri Ben-Achour: So, whenever there are proposals to tax the wealthy in a given city or state, the counterargument is, “Don't kill the golden goose, because they will leave.” Do wealthy people flee high-tax places for low-tax places?

William Frey: Well, it's certainly possible that they do. Many studies have shown that very rich people, when they have to make a decision of where they want to live, and there's a significant tax on their income — and maybe even on their wealth to some degree — they're going to say, “Well, gee, I can do better somewhere else and save a lot of my money.” But when you're talking about those people, the very high people, this is not a group that makes a big dent in the overall state or urban area population. So, yeah, it's something to be considered, but let's not overdo it.

Ben-Achour: What about, you know, the rest of us? There's some research suggesting we are all moving less as a nation — internal migration is falling. Why is that?

Frey: Well, if you look at this historically and go back to the 1950s, about one-fifth of the population moved every year. It's now down to, I think in this last year, it's maybe 9% rather than 20%. And what's changed over time? Well, back in the 1950s, usually you had a single-earner family, so you only needed to change one job if you wanted to move. There were many more people who lived in rented homes than in owned homes. Renters are much more likely to move than owners. And fast forward all the way now, people are more stable. They own their homes more quickly. There are multi-earner households. And we're becoming an older population, and it's really the younger people who move.

Ben-Achour: When people move, why are they moving?

Frey: Well, when they move across state lines or across metropolitan areas — or labor markets, as we might say — they're moving for labor kinds of reasons: to get a new job, because they're transferred, or maybe they think they're going to get a job in this other place. That's a big part of that movement. Some of it is family-related, too. They're going to move because they want to move in with their relatives, or they just got married. And some of it’s housing-related, especially in high-cost housing areas. But if you had to pick one thing, you would have to say it has in some way to do with jobs.

Ben-Achour: Yeah. So, less taxes and more like the cost of everyday living and ability to make a living?

Frey: Yes, that's right. It has to do with people's general idea of what kind of money are they going to make next year, if they can find a job in this place? Or, you know, a lot of people who move are young people. When they’re in their 20s or early 30s — which is where more than half of the movers are among adults today — I don't think they're thinking that much about the income tax. They're thinking about these other things: their home, their job, their family.