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Immobility and Joblessness

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The Minneapolis Fed study on the myth of American mobility is meant to put to rest the fear that unemployed workers can’t move to states with stronger job markets, perhaps stalling the economy for years.

I’m not sure it actually accomplishes this.

While I am convinced by the study that the alleged sudden drop off in Americans moving was a statistical illusion, I do not agree that the study really shows that immobility is not to blame for persistent unemployment.

Americans have been moving less for a decade and a half. The study shows that the Great Recession didn’t change this—we kept on not moving on at pretty much the same rate we were before. The line doesn’t jump.

But it should have jumped. With all the job losses we saw, there should have been a sudden and dramatic increase in people moving to find new jobs.

The fact that an event as calamitous as the Great Recession occurred and it did not result in a shift in mobility implies that there is something going wrong—people are stuck.

I suspect that what has them stuck is the inability to sell their home without taking losses or defaulting on their underwater mortgage.

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