After the pandemic started, the story was that people were relocating more frequently. But has this trend continued here in New England? The answer is no.

Boston Fed Economist Pinghui Wu says people in New England today are far less mobile than they were before the pandemic. Does this have implications for the housing markets or labor markets? If so, what are they?

Allison Ross:

Hello and thank you for joining us for this episode of 600 Atlantic. I'm your host, Allison Ross, and today we’re talking about mobility. Essentially, it's whether people are moving and where they’re moving to.

After the pandemic, the story was that people were relocating. You, the listener, may have opted for a change in location or know someone who did. But has this trend continued here in New England? Well, the answer is no. According to a paper by Boston Fed economist, Pinghui Wu, most of the New England states are largely back to pre-pandemic levels in terms of whether people are moving into or out of the six states.

But that doesn't mean nothing has changed. Pinghui's paper indicates that, in fact, people in New England today are far less mobile than they were before the pandemic. They're just not making as many moves, either long distance or short distance moves, which sparks a couple of questions. Does this have implications for the housing markets? Labor markets? And what are they?

Well, Pinghui is here with us today to answer those questions. So, welcome Pinghui.

Pinghui Wu:

Thanks for having me.

Allison Ross:

I wanted to just start by defining what your paper refers to as domestic geographic mobility. So, what is that, and what are we measuring?

Pinghui Wu:

Yes. The domestic geographic mobility rate I developed in this report is defined as the total number of people who move between Census tracks as a percentage of the base population of an area. So essentially, the measure really catches any move within the country where the new residence is located not within the immediate block surrounding a person's previous residence, and it reflects U.S. residents' gross tendency to change residences domestically.

Allison Ross:

So, geographic mobility is about whether people are making short distance or long-distance moves. And the stat that really jumps out is that short distance moves have dropped dramatically in New England since 2019. So, can you talk a bit to what happened there?

Pinghui Wu:

So, in my analysis, I found that New England's domestic geographic mobility rate dropped 32% from 2019 to 2024. So, in other words, nearly one-third fewer New Englanders changed their residences in 2024, relative to five years earlier, before the pandemic.

And the decline, if we look more closely at the statistics, it was really driven by a decrease in short distance moves, such as a move within the Boston metro from Boston to Cambridge. And this kind of moves dropped by 37% in New England during this period.

And the pattern is not specific to a certain demographic group. It's observed across people of different ages, credit ratings, and mortgage ownership status. So, this suggests that people's ability to move locally and accommodate any changes in their housing needs has really declined significantly across consumer groups over the last four years.

Allison Ross:

Now, if I'm the listener at home, I might be thinking, “Why does a number like that matter to me or to the Boston Fed?” When economists see that kind of number, what is it telling them? And why would someone living in New England care?

Pinghui Wu:

We care or economists care about domestic mobility rate because mobility reflects a lot of other life decisions. And a low mobility rate is indicative of other social changes. Let me make two examples.

So, for example, when a couple is not able to afford to move to a larger space, they may choose to have fewer kids or none at all than compared to if they were able to afford doing so. Or when an elderly person cannot move, they may have less access to age-appropriate housing or services. And so, a low geographic mobility rate here is a signal that people may have lower quality of life right now compared to five years ago. And if the low rate persists, it may have other long-term demographic economic implications through changing the way people live and form families.

Allison Ross:

So, this impacts people at every stage of life?

Pinghui Wu:

Yes, correct.

Allison Ross:

Now, from your research, what could be some of the potential reasons for the decline in local mobility in New England?

Pinghui Wu:

New England is not unique in observing this decline in short distance mobility. The region and the country, in fact, experienced almost parallel downward trends in mobility after COVID. So, while I don't have information on why New Englanders specifically are not moving, the parallel trends allow me to explore possible reasons behind a decline using national level data. I found through U.S. level survey evidence that nearly half the decline in short distance mobility is a result of people's deteriorating ability to afford their own housing or afford a better housing.

Additional to these two reasons, the need to move for commuting purposes has also decreased, perhaps because of the rising hybrid or remote-work arrangements. But these commute-related reasons accounted for only maybe 10% of the total decline, and it was a secondary cause of the decline we are observing now.

Allison Ross:

I want to highlight a related finding in your report about long distance mobility or whether people are making long distance moves. So, first off, what is considered a long-distance move?

Pinghui Wu:

Long distance moves, say a move between Boston and New York City, often involve a job change. And as a result, we can use long distance geographic mobility rate as an indicator of how freely a worker can move across different local labor markets and find a job.

So, when workers are not moving as freely, they face a more limited choice set of job openings. And employers in turn, they face a more limited choice set of job applicants. And as a result, a decline in long distance mobility is considered a sign that workers are not being matched to the jobs that best fit them, and a less efficient spatial allocation of workers.

Allison Ross:

And in your report, initially, the numbers didn't move much from pre-pandemic days, but then started to change. So, can you explain what you found and what the implications are?

Pinghui Wu:

Unlike short distance mobility, which fell right from the start of the pandemic, my report found that long distance mobility remained very stable between 2017 and 2022 but started falling in 2023 and continued to fall in 2024. And as of June 2024, long distance geographic mobility in the region is now 16% below its 2019 level.

So, what this trend is telling us is that while COVID had a more limited impact on the flow of workers across labor markets, the post-COVID economy is putting some pressure on how freely workers can move across labor markets and find a job.

Allison Ross:

I want to hit on another aspect of your paper, which is net domestic migration.

So, just to start, can you explain what that is?

Pinghui Wu:

Sure. The net domestic migration rate is defined as the number of U.S. residents who move into an area, minus the number of people who move from the area, divided by the base population of the area. What this is telling us is that a positive net migration rate would indicate that a geographic area has more people moving in than moving out, which results in a population gain.

But on the other hand, a negative net migration rate reflects more people leaving the area than moving in and a population loss. And at Boston Fed, we have a longstanding interest in net domestic migration rate because historically New England as a whole consistently experience population loss from a domestic out migration, which has a direct implication on the labor supply and economic growth in the region.

Allison Ross:

So, just to recap. It's really about where people are moving rather than whether people are moving?

Pinghui Wu:

Correct.

Allison Ross:

And your paper indicates that, yes, people really were leaving or moving into particular states at faster rates during the pandemic, but can you talk about what your research indicates is happening now?

Pinghui Wu:

The dynamics of net domestic migration in New England changed significantly after the COVID-19 pandemic. In particular, the northern New England states, Maine, New Hampshire, and Vermont, they experience substantial population gains after the pandemic started. And Connecticut and Rhode Island also saw lower levels of population loss compared to the pre-pandemic period because of relative decline of out-migrants, people who move away from the states.

And on the other hand, Massachusetts sustained a much more substantial population loss from people leaving the state during the COVID period.

However, these changes in people's geographic preferences appear to be more mostly transitory and temporary, and by 2024, the net migration rates in a region had largely gone back to the pre-pandemic patterns.

Allison Ross:

But one New England state has seen a notable change. Can you talk about what's happening in Connecticut?

Pinghui Wu:

So, unlike the other New England states, Connecticut continues to see relatively fewer people moving to other regions from the state, compared to the pre-pandemic baseline level. And then so, this suggests that there could be structural shifts in the region's commuting patterns, such as new commuting ties between Connecticut and New York City enabled by this new hybrid work arrangement.

It will probably take some time to fully distinguish any long-term changes as the workplace expectations and market conditions are still evolving, and we are probably not reaching the new equilibrium yet.

Allison Ross:

So, more to come. And speaking of which, what's next in this area of research?

Pinghui Wu:

So, through the decline in domestic mobility rate, we can see that the changes in the economy since COVID have a real effect on people's housing decision. And it's a little bit too early to ascertain whether this downward trend we are seeing will reverse soon. But if affordability is the primary factor driving the decline, then I think we should continue to monitor changes in rent, house prices, and mortgage rates, things that will affect people's ability … how affordable it is to move.

And if the trend continues, then there will be long-term implications: demographic composition or fertility rates. And so, these are also some other aspects I feel like we should keep an eye out for the future.

Allison Ross:

Okay. A lot of great information. Pinghui, thanks so much for joining us.

Pinghui Wu:

Thank you for having me.

Allison Ross:

The title of the paper is "Domestic migration in New England since the COVID-19 pandemic." You can find that on bostonfed.org. You can also check out bostonfed.org/sixhundredatlantic, where you can listen to interviews like this one as well as our podcast seasons. And while you are there, you can also subscribe to our email list and stay up to date on new episodes. And please don't forget to rate, review, share and subscribe to Six Hundred Atlantic on your favorite podcast app. I'm Allison Ross signing off for another episode of Six Hundred Atlantic. Thanks for listening.