Below is an excerpt from a new Demography Unplugged research note written by Hedgeye Demography analyst Neil Howe. Click here to learn more.

America's Mobility Decline: Moving Rate Falls Below 10% First Time Ever - z america

According to new Census data, only 9.8% of Americans moved in the year ending in March. This is the lowest rate since the government began tracking it in 1947 and the first time it’s fallen below 10%, thanks in part to an especially sharp decline in moving rates among Millennials. (Census Bureau)

NH: From Walt Whitman's The Open Road to Jack Kerouac's On the Road, geographic mobility has been a distinctive American trait. "Go west, young man, and grow up with the country," announced Horace Greeley in 1865. Even as recently as the postwar American High--a half century after the official "closing" of the American frontier--Americans were still celebrated around the world as a restless people, always on the move.

We may need to reconsider that self image. Starting in the late 1960s the rate at which Americans change their residence has declined steadily and today is less than half of what it was fifty years ago.

See the first chart below. Think the America of Eisenhower, do-wop, and black and white TV was a staid and static place? Think again. During the 1950s, an average of 5.2 million Americans moved from one state to another each year. That's more than in any year during the decade following the Great Recession--despite the fact that America's population has roughly doubled between then and now.

The decline has occurred in all types of moves: within counties; between counties but within the same state; and between states. Over the business cycle, geographic mobility typically dips just after a recession, rises during the recovery, and peaks late in the expansion. Remarkably, the mobility rate has shown no such buoyancy since the depths of the Great Recession. Through 2019, the rate has fallen for four years straight--and for seven out of the last eight years.

One probable consequence of declining mobility is a slowing rate of convergence in per-capita incomes between states. In the century before 1980, state incomes converged at an average annual rate of 1.8%. From 1990 to 2010, that rate fell by half. And in recent years the convergence has stopped altogether--triggering fears of a re-emerging regional divide in America between haves and have-nots (see "trendspotting: 07/01/19"). See the second chart below.

What explains America's mobility slowdown? Explanations abound. Let's look at demography, "job lock," real estate, and the economy.

First, demography. Yes, an aging society moves less. This is because there is a lifecycle pattern to mobility: People generally move at higher rates as young adults and at lower rates as they grow older. As America's entire population ages--and especially as Boomers retire--there are relatively more adults in the lower-rate age brackets. Yet by all estimates this slow-moving "age effect" can only explain a small share of the mobility decline. Most of the decline is driven by drops in the mobility rate of each age bracket over the last 50 years. And in recent years, the rates have been declining the most rapidly for Americans under age 45--that is, for Millennials and late-wave Xers. See the third chart below.

More important than the "age effect," then, is the "generational effect." Why are later-born cohorts moving less than earlier-born cohorts? In particular, if we're just looking at the decline since 2000, why are Millennials in their 20s and early 30s moving so much less than earlier generations at the same age? One obvious explanation is growing risk aversion--a Millennial trait we have covered in this context (“Trendspotting: 07/02/18”) as well as more generally ("Trendspotting: 05/06/19"). Compared to Boomers or Xers at the same age, Millennials are less likely to move to risky new places without friends, family support, official credentials, and an invitation. Millennials are famously less trusting of strangers than older generations.

The mainstream media sometimes imply that the economic challenges facing today's young adults--and the related delays in their age of marriage, child bearing, and home buying--are all contributing to mobility decline. But this defies common sense. A generation facing economic hardship ought to be more--not less--willing to move and take risks. Indeed, all else being equal, marriage, children, home ownership, and less education make adults less likely to move. A Millennial Generation top-heavy with single and childless and college-educated renters should therefore be more willing and able to relocate on a moment's notice. But they're not.

Boomers may not be helping much. To be sure, Boomers in their 60s and 70s are increasingly employed--and this almost certainly helps to boost mobility in their age bracket. On the other hand, whether they are working or not, Boomers prefer to "age in place" rather than move into senior communities (see "Trendspotting: 11/12/18") and this may be suppressing mobility.

Moreover, a growing share of these aging-in-place Boomers share their homes with their adult Millennial kids (see "Trendspotting: 10/07/19"), which clearly discourages Millennials from moving. In fact, the growing economic importance of the extended family may be doing as much to pull down mobility today as the rise of nuclear family once boosted mobility during the American High.

What about "job lock"? One popular explanation for declining mobility is that a rising share of workers are "locked" into their current job--maybe due to employer-sponsored health insurance or because two-earning couples find it harder to move at the same time. The data don't really support this explanation. The prevalence of two-earning couples hasn't risen much over the last 25 years. And health-insurance worries are unlikely to deter job mobility among young adults, whose mobility rates have declined the most.

Real estate--and in particular, the high and rising price of housing in urban centers--is a more likely culprit. The evidence does suggest that non-college migration from low-pay to high-pay regions is negatively correlated with housing costs (which in turn are correlated with land-use regulation). NIMBY zoning for the benefit of property owners may help explain David Autor's recent finding that, after accounting for housing costs, noncollege workers no longer have any incentive to move to most big cities. See the fourth chart below. Regulatory constraints on housing supply are just one of many state- and local-government policies that may turn away newcomers or keep current residents from leaving. Others include occupational licensure, welfare benefit eligibility, residential subsidies, and vast sunk infrastructure costs in declining counties.

Or, at the broadest level, maybe the problem isn't so much that people or laws are changing. Maybe it's that our economy is losing its dynamism and is no longer generating new firms and new jobs at the same rate as it used to. A large and growing economic literature identifies a "decline in business dynamism" (with falling rates of job and firm turnover) over roughly same period in which geographic mobility has been declining. 

So take your choice. An aging society. A more risk-averse rising generation. The graying of wealth and the strengthening of multigenerational families. More anti-growth and pro-incumbent regional policies. More localism. Less trust in strangers. Declining business dynamism. All of them are contributing to a steep decline in geographic mobility.

Ominously, such behavior may become self perpetuating--as Tyler Cowan suggested in his recent book The Complacent Class--since individuals and families no longer accustomed to moving tend to develop stronger regional attachments over time. Mobility, like stasis, is a social habit that can be unlearned as easily as it is learned.

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Neil Howe is a renowned authority on generations and social change in America. An acclaimed bestselling author and speaker, he is the nation's leading thinker on today's generations—who they are, what motivates them, and how they will shape America's future.

A historian, economist, and demographer, Howe is also a recognized authority on global aging, long-term fiscal policy, and migration. He is a senior associate to the Center for Strategic and International Studies (CSIS) in Washington, D.C., where he helps direct the CSIS Global Aging Initiative.

Howe has written over a dozen books on generations, demographic change, and fiscal policy, many of them with William Strauss. Howe and Strauss' first book, Generations is a history of America told as a sequence of generational biographies. Vice President Al Gore called it "the most stimulating book on American history that I have ever read" and sent a copy to every member of Congress. Newt Gingrich called it "an intellectual tour de force." Of their book, The Fourth Turning, The Boston Globe wrote, "If Howe and Strauss are right, they will take their place among the great American prophets."

Howe and Strauss originally coined the term "Millennial Generation" in 1991, and wrote the pioneering book on this generation, Millennials Rising. His work has been featured frequently in the media, including USA Today, CNN, the New York Times, and CBS' 60 Minutes.

Previously, with Peter G. Peterson, Howe co-authored On Borrowed Time, a pioneering call for budgetary reform and The Graying of the Great Powers with Richard Jackson.

Howe received his B.A. at U.C. Berkeley and later earned graduate degrees in economics and history from Yale University.