Discussion

Andrew Atkeson pointed out that rural-to-urban transitions are typically associated with a selection effect. Those who leave early are more skilled and adaptable. As time goes by, thosewho haven’tmigrated are less likely to transition to a different job and remain in place. Atkeson askedwhether the same phenomenon is at play in the United States. The authors mentioned that mobility among the young is usually an important margin of adjustment. They noted that a striking feature of the data is that the young aren’t moving out with the same propensity as in the past. Several participants offered comments and formulated conjectures regarding the possible causes for the lack of mobility. Richard Rogerson shared Atkeson’s view that selection might play an important role. Rogerson suggested that migration of skilled workers out of manufacturing towns leads to a collapse of the tax base and a deterioration in the provision of services. Guido Lorenzoni noted that relocating is an investment activity. As such, the return on this investment is crucial for geographic mobility. Lorenzoni inquired about the evidence on the returns to moving out of manufacturing towns. Robert Gordon argued workers may not be able to pay the costs ofmoving simply because their wages are too low. Gordon pushed back on the idea that land-use regulation is an impediment for mobility, an idea that was raised by both discussants. He reminded the audience that most population growth in the United States is in large flat areas, which do not have exorbitant real estate prices. Valerie Ramey joined the discussion and referred to Michael W. L. Elsby and Matthew D. Shapiro (“Why Does Trend Growth Affect Equilibrium Employment? A New Explanation of an Old Puzzle,” American Economic Review 102, no. 4: 1378–1413). Their work emphasizes the role of labor productivity growth for the decline in labor mobility. When labor productivity growth is low, as it currently is, workers are not willing to move away for low-wage jobs.