July
9
2009
This paper, written by a senior economist at the The New England Public Policy Center at the Federal Reserve Bank of Boston, examines factors underlying why, after the 2001 recession, the number of people leaving New England exceeded those entering. It examines statistically the relative role of three economic factors—labor market conditions, per capita incomes, and housing affordability—in determining domestic state-to-state migration flows. The paper finds that, while all three economic conditions are significant determinants of migration, their impact varies and has changed considerably over time. For example, the importance of per capita income has fallen considerably since the late 1970s, while that of housing affordability has risen. Forecasts show that, while New England will continue to lose individuals to other states this year, the pace of out-migration will likely slow because the region is performing slightly better than the nation as a whole during the current recession. However, this trend may reverse itself if economic conditions deteriorate in the New England states relative to other parts of the country.