Tuesday, October 14, 2008

Brain Gain even if not by choice

So a common question of late is why the local labor force has been going up despite an increase in the unemployment rate here.

Models of migration come up with an impact of the relative economic conditions in one region versus elsewhere. It's the relative part that's important. Just because things are getting worse here, if things are that much worse elsewhere it will affect migration decisions. The converse is also important. Even if things are doing well here, but if things are super-hot elsewhere, people will still leave. That was probably the case explaining outmigration rates from Pittsburgh in the latter part of the 1990's.

How to measure relative economic conditions? Relative job growth, relative wage levels and other things all matter, but one big question in migration metrics is understanding which factor is causal and not just an effect. Relative unemployment rate seems to be a decent metric for capturing what is driving migration decisions in the near term future. Thus why I have sometimes shown my tracking of the regions unemployment rate relative to the US.

But here is a different picture of how Pittsburgh's unemployment rate compares. I have mapped out the 20 regions which typically attract the most people migrating out of Pittsburgh. The size of the bubbles represents the typical size of the outmigration flow and the color represents the relative rate of unemployment compared to Pittsburgh.
So in 15 of those 20 regions, the unemployment rate is worse than here. We are tied with NY for the moment, but I bet that will change given the carnage in the fiancial industry. Basically, in most of the places where Pittsburgher's usually head off to, things are bad and getting worse. So within all the regular churn in the job market here (much larger than the population change would imply), those folks who might normally be looking for, or at least be amenable, to jobs in other regions are probably finding their job prospects in those other markets to be diminished of late. Thus they stay, even if they are unemployed. Thus our unemployment may go up, but so does labor force. Likewise I bet more than a few people finding economic conditions elsewhere pretty bad are moving here sometimes after they have found a job or even to come back to look for a job.


Anonymous Anonymous said...

The map suggests a good trivia question. Which city has the lowest unemployment rate: Atlanta; Charlotte; Chicago; or Pittsburgh?

Of course, there's always the question of the quality of the job. Does Pittsburgh have a reasonably high proportion of good paying white collar jobs compared to the other cities? Or is everybody driving a PAT bus? ;~>

Tuesday, October 14, 2008 9:06:00 AM  
Anonymous Anonymous said...

Isn't it possible that instead of less out-migration, we will see a different list of places people are moving to.

Tuesday, October 14, 2008 10:58:00 AM  
Blogger C. Briem said...

It's a good question. My answer is mostly not. The spatial pattern of where Pittsburghers migrate to when they leave is pretty consistent in good times and bad. So if folks are not going to Cleveland, Philly, DC and some smaller nearby places they are not necessarily going to farther places in any big numbers. Sure, some hot places far away will pull more Pittsburghers if conditions are different enought from that of Pittsburgh, but the top line number will not be changed that much... but as of the moment its mostly moot: not many places are doing that much better than we are.

Tuesday, October 14, 2008 4:34:00 PM  
Anonymous Anonymous said...

What about Florida? Don't a lot of Pittsburghers move down to Florida when they retire? Or do they prefer to age in place, in contrast to retiress from NY, NJ and Philly? Or does your list of outmigration cities only include places people migrate to when they look for better jobs?

Tuesday, October 14, 2008 8:45:00 PM  
Anonymous Anonymous said...

"...not many places are doing that much better than we are."

That's probably a better sign of how bad thinks are getting than the TED spread.

Tuesday, October 14, 2008 9:29:00 PM  
Anonymous Anonymous said...

"things" not "thinks". Sorry.

Tuesday, October 14, 2008 9:29:00 PM  
Blogger C. Briem said...

Florida... it shows up in the top 20 regions with Tampa, Florida and Orlando in that list which I think is mostly because of elderly migration. It's in that data, but conceptually I think of retirement migration flows separately from workforce migration flows... and that retirement migration flows has historically gone on no matter the economic circumstances as well although I wonder if that will be as true in the future if people's retirement funds are really depleted. There is probably a future paper for someone in how the financial crisis has effected post-retirement migration.

Thursday, October 16, 2008 5:39:00 AM  
Anonymous Anonymous said...

It probably depends on which is dropping faster, Florida housing prices or 401k balances.

Thursday, October 16, 2008 2:12:00 PM  

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