Settlers in the New World didn’t stick to the coasts. The history of the American experience has been one of mobility, particularly westward. “Go West, young man!” and all that.

But not anymore. First, Americans aren’t moving as much generally as they used to. In 2018, fewer than 10 percent of us changed residence within the past year, half of the level of the 1980s. 

And the drive to journey westward, in particular, has dissipated. As Philadelphia Fed economist Kyle Mangum writes in the new analysis “No More Californias”: 

This geographic expansion of population throughout the continent was mostly complete by the 1980s. … The 20th century was then essentially the last movement in the long transition of population expansion across the American continent. Aided by new technologies, unpopulated areas filled with residents relocating from older, colder areas. As the technological shocks abated, and as development blanketed the once-vacant land, rates of population change slowly converged across space. Today, the growing areas are not new cities in unpopulated regions but rather the established midsize, interior cities throughout all regions of the county.

So perhaps this is now a permanent “new normal” and what economists would call a “long-run spatial equilibrium.” But is it a balance policymakers should wish to disturb? Do we want people to move more? As Mangun notes, “On average, all types of people show a preference for their initial locations — an attachment to home.” 

Staying put has a lot going for it, including the close relationships and informal safety net provided by friends and families. Moreover, all that moving around may simply have been a phase in the American life cycle. Now it’s over. Americans arrived in California, and there was nowhere else to go. And most of us seem OK with that.

Then again, perhaps mobility is being artificially restricted by bad policy. Mangum:

Regulations that make it hard to build new homes increase costs and prevent cities, especially those offering high incomes or many amenities, from adding new residents. Suboptimal urban planning could lead cities to be overly congested and below capacity. This is the more pessimistic perspective, suggesting that restrictions on population growth restrain productivity growth and exacerbate inequalities by prohibiting access to the best spaces. In this case, policy (or perhaps the removal thereof) has more scope to improve welfare.  But the goal of these policies is not to encourage people to move more frequently per se but rather to enable desirable cities to accommodate more residents. … To the extent that there are market failures inhibiting population growth in some places, however, there is a need for a policy intervention. If housing regulations are the result of rent-seeking on the part of current residents, or if additional population would enhance worker productivity, or if poor urban planning leads to unproductive (and unenjoyable) travel congestion, then a “benevolent social planner” would design the infrastructure (physical and legal) to accommodate more people. In many cases, local interests may oppose this (for individually rational reasons), but such “growth positive” policy may nonetheless benefit society. If we are out of Californias — if, that is, there are fewer new places to settle — we must manage the urban frontier with great care.

For more on a) why housing costs have skyrocketed, b) to what extent these costs keep people from moving to prospering cities in search of opportunity, and c) how can we combat this issue through both local and state policy, please check out my long-read Q&A (also an episode of my Political Economy podcast) with economist Daniel Shoag from late last year.

This article by James Pethokoukis first appeared in AEIdeas.