Wednesday, July 30, 2008

Income and Migration

Income disparity between geographic regions is a good predictor of migration. People move to where there is more opportunity. However, the characteristics of the migrants who actually seek better wages are surprising:

... According to the Migration and Remittances Factbook 2008, immigrants tend to flow from poor to wealthy countries. For this reason, many people assume that it is the poor rather than the rich people in these poor countries who wish to migrate. Gallup Poll data clearly reveal that this is not the case.

People may also assume that personal poverty fuels migration because they confuse economic dissatisfaction with economic deprivation. In poor and wealthy countries, the Gallup Polls show that people who say they are dissatisfied with their standard of living are more likely than those who say they are satisfied with their standard of living to report that they would like to migrate. However, dissatisfaction with one's standard of living is not the same as poverty. In fact, statistical analyses of personal income and satisfaction with one's standard of living revealed that each of these variables was uniquely associated with the reported desire to migrate. Within a given country, it is those who are wealthy and dissatisfied with their standard of living who are more likely to report that they wish to migrate.

Explaining interstate migration appears to be similar to models of US domestic migration. People who are relatively the wealthiest and best educated tend to move the longest distances. The levels of education and lifetime income are positively correlated, which shouldn't be news to anyone. The crux of the misperception:

Give me your tired, your poor, your huddled masses yearning to breathe free ...

The stereotype of migrants is one of desperation, not a person of means making a rationale choice. Any community that does a good job of improving the station of the next generation is likely to spur out-migration, a.k.a. brain drain. With each progressive graduation, the more likely a young adult is to leave. Until taxpayers wrap their heads around this fact of life, I expect the annual march of misguided migration policy to continue.

6 comments:

Brian Kelsey said...

Jim, you can explore this further with migration data published by the IRS, which includes data on income. It's not perfect since you only get information on people who file tax returns, but it's a start. If you're interested, give me a few pairs of counties, regions, or states you'd like to look at, and I'll pull the data for you.

Jim Russell said...

Brian,

Would it possible to compare the out-migration rates of geographic units who have (statistically) the "same" income?

What I have in mind is testing the hypothesis that Rust Belt cities have lower than expected rates of out-migration given income levels.

Brian Kelsey said...

Sure, that seems straightforward (famous last words). Although, we'll have to look at metro ares or counties. The IRS doesn't publish migration data at the city or zip code level, unfortunately. Where do you want to start?

Jim Russell said...

I think county would be the appropriate unit of analysis (larger data set number), but controlling for population might be easier metro areas. Sort by average income of out-migrants and then divide the counties (or metros) into 5 income brackets (a la the Gallup article). Run a regression analysis to reveal abnormal out-migration rates. Map the deviants and see if there is a pattern.

Brian Kelsey said...

Sorry, I should have been more specific in my last comment. I meant which geography would you like to start with? Are you interested in Ohio mostly?

Jim Russell said...

I'm interested in the Rust Belt region. How about the pair of Ohio and Colorado?