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An SVAR Model of Fluctuations in U.S. Migration Flows and State Labor Market Dynamics

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  • Mark D. Partridge
  • Dan S. Rickman

Abstract

Large internal migration flows are typically viewed as evidence of flexible U.S. labor markets adjusting to asymmetrical regional demand shocks. Yet, amenity‐induced migration flows suggest that they may not necessarily facilitate adjustment to demand shocks and instead may be destabilizing. This paper employs a structural vector autoregression model with long‐run identifying restrictions to account for both labor‐demand and labor‐supply shocks in examining the role of migration in U.S. regional labor‐market fluctuations. The results reveal that less than one‐half of innovations in state migration flows are responses to labor‐demand shocks. It is not until the third period that migrants fill a majority of demand‐induced jobs in a typical state, while it takes about 7 to 8 years for migration flows to fully adjust to labor‐demand shocks. The extent of the migration response also has implications for how much state and local economic development policies benefit original residents.

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  • Mark D. Partridge & Dan S. Rickman, 2006. "An SVAR Model of Fluctuations in U.S. Migration Flows and State Labor Market Dynamics," Southern Economic Journal, John Wiley & Sons, vol. 72(4), pages 958-980, April.
    • Handle: RePEc:wly:soecon:v:72:y:2006:i:4:p:958-980
    DOI: 10.1002/j.2325-8012.2006.tb00748.x
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    2. Mark D. Partridge & Dan S. Rickman & M. Rose Olfert & Ying Tan, 2015. "When Spatial Equilibrium Fails: Is Place-Based Policy Second Best?," Regional Studies, Taylor & Francis Journals, vol. 49(8), pages 1303-1325, August.
    3. Björn Alecke & Timo Mitze & Gerhard Untiedt, 2010. "Internal migration, regional labour market dynamics and implications for German East-West disparities: results from a Panel VAR," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 30(2), pages 159-189, September.
    4. Monastiriotis, Vassilis & Kaplanis, Ioannis, 2011. "Flexible employment and cross- regional adjustment," Working Papers 2072/179671, Universitat Rovira i Virgili, Department of Economics.
    5. Mark Partridge & Dan Rickman, 2009. "Canadian regional labour market evolutions: a long-run restrictions SVAR analysis," Applied Economics, Taylor & Francis Journals, vol. 41(15), pages 1855-1871.
    6. Franz Hamann & Cesar Anzola & Oscar Avila-Montealegre & Juan Carlos Castro-Fernandez & Anderson Grajales-Olarte & Alexander Guarín & Juan C Mendez-Vizcaino & Juan J. Ospina-Tejeiro & Mario A. Ramos-Ve, 2021. "Monetary Policy Response to a Migration Shock: An Analysis for a Small Open Economy," Borradores de Economia 1153, Banco de la Republica de Colombia.
    7. Richard J. Cebula & J.R. Clark, 2011. "Migration, Economic Freedom, and Personal Freedom: An Empirical Analysis," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 27(Fall 2011), pages 43-62.
    8. Mulholland, Sean E. & Hernandez-Julian, Reynaldo, 2021. "Does Economic Freedom Lead to Selective Migration by Sex and Race?," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 53(1), July.
    9. Tervo, Hannu, 2016. "Do People Follow Jobs or Do Jobs Follow People? The Case of Finland in an International Context," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 46(1).
    10. Timothy W. Kelsey & Mark D. Partridge & Nancy E. White, 2016. "Unconventional Gas and Oil Development in the United States: Economic Experience and Policy Issues," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 38(2), pages 191-214.
    11. Daniel A. Broxterman & William D. Larson, 2020. "An empirical examination of shift‐share instruments," Journal of Regional Science, Wiley Blackwell, vol. 60(4), pages 677-711, September.
    12. Gunderson, Ronald J. & Pinto, James V. & Williams, Robert H., 2008. "Economic or Amenity Driven Migration? A Cluster-Based Analysis of County Migration in the Four Corners States," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 38(3), pages 1-12.
    13. Dan S. Rickman & Hongbo Wang, 2024. "Estimating the economic effects of US state and local fiscal policy: A synthetic control method matching‐regression approach," Growth and Change, Wiley Blackwell, vol. 55(2), June.
    14. Michael Landesmann & Sandra M. Leitner, 2015. "Labour Mobility of Migrants and Natives in the European Union: An Empirical Test of the 'Greasing of the Wheels’ Effect of Migrants," wiiw Working Papers 119, The Vienna Institute for International Economic Studies, wiiw.
    15. Cebula, Richard J. & Alexander, Gigi M., 2006. "Determinants of Net Interstate Migration, 2000-2004," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 36(2), pages 1-8.
    16. Gunderson, Ronald J. & Sorenson, David J., 2010. "An Examination of Domestic Migration from California Counties," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 40(1), pages 1-19.
    17. Juessen, Falko & Linnemann, Ludger, 2012. "Identifying Regional Labor Demand Shocks Using Sign Restrictions," IZA Discussion Papers 6767, Institute of Labor Economics (IZA).

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