Does Low Wealth Constrain Long-Distance Migration? Evidence from the NLSY79 Cohort

Although long-distance migration can be very beneficial, some families may have too little wealth (or liquidity) to finance a move, which may involve direct transportation costs and foregone earnings. I use individual-level longitudinal data (NLSY79) to assess whether wealth holdings directly influence migration decisions in the U.S. I focus on long-distance migration between labor markets, which imposes high migration costs but offers potentially better labor market outcomes. Contrary to a liquidity constraint story, I find consistently that plenty of people with low and even negative wealth move, and that they are even more likely to move than people with higher wealth holdings. The lack of a positive relationship between wealth and cross-labor market migration remains in alternative subsets of respondents, controlling for many household characteristics, in very flexible nonlinear models, and when using inheritance income as an instrument for wealth.