Moving within or between countries is often part of a life change that triggers significantly better outcomes. Let’s take a step back from the current dispute between the U.S. and the European Union over the recent surge in migration and consider this topic more broadly. David MacKenzie writes, “Fear and Tears: Should More People Be Moving Within and Among Developing Countries, and What’s Stopping Them?” (World Bank Research Observer(February 2024, 39:1, pp. 75-96). In context, McKenzie wrote:
The UN estimates that there were 272 million international migrants in 2019. This may seem like a large number, but it is only 3.5% of the world’s population. Migration rates are lower in the poorest regions. Migrants make up only 2.5% of the population of sub-Saharan Africa and 2.2% of the population of South Asia (World Bank 2016). Migration rates are even higher in small island nations, with more than 40% of Jamaicans, Tongans, and Samoans living abroad. However, even in these very small and isolated countries, many people do not migrate. Internal migration rates are much higher. Data on what constitutes internal migration are difficult to compare precisely across countries, but the UN (2013) estimates that 763 million people live within their country of origin. Combining this with international migration data suggests that around 1 billion people, or one in seven of the world’s population, have migrated.
Although McKenzie focuses on the global picture, it is worth noting that mobility within the United States is also on a downward trend. The reason is unclear. The downward trend is so broad that it affects all groups: homeowners and non-homeowners, seniors and non-seniors, high-income and low-income. But as discussed here and here (for example), the downward trend seems pretty clear.
I have moved across the United States twice as a child and five times as an adult. I don’t think it’s unusual for readers of this blog to move long distances multiple times, but it’s quite different from the experience of most Americans and most people around the world.
As you can imagine, there is a lot of research going on in this area, and MacKenzie provides a clear overview of the evidence. Can the benefits of moving be explained by observable factors, such as education or age? (No.) Can the benefits of moving be explained by unobservable factors, such as personality traits, including persistence? (Hard to say, but probably not.) Given these benefits, can the seemingly low levels of moving be explained by factors such as moving costs, quotas that limit moving, pessimistic estimates of the potential benefits of moving, or short-term time horizons that see only the immediate costs of moving and not the long-term benefits? (All of these factors seem real, but the benefits of moving are so large that they alone do not seem sufficient to explain the lack of moving that occurs.)
Previous research seems to leave a puzzle. The explanation for the lack of movement is not strong enough. Additional reasons for the lack of movement are needed. Here, MacKenzie proposes two possibilities, which he calls “fear” and “tears.”
In his discussion of “Fear,” McKenzie writes:
Economists have paid far less attention to what I call fear. Fear is the enormous uncertainty associated with migration that is difficult to quantify. This type of unquantifiable uncertainty, also known as knight uncertainty, can include fears about the safety conditions at the destination (Shrestha 2020 found that Nepali migrants overestimate their risk of death), the ability to make friends and adapt, whether they will like living in the new location, and fears about whether they will soon. In the case of knight uncertainty, there is no unique probability distribution for the possible outcomes of employment, wages, and amenities, so individuals cannot make decisions simply by choosing the action that maximizes their expected utility. Bewley (2002) argues that in such cases there can be a bias toward inertia. Decision makers may stay in the status quo unless one alternative dominates the other in all possible probability distributions. This can create a bias toward immobility, since individuals will only move if it is better to do so in all possible probability distributions. This may also explain why, even if the overall benefits are positive on average across the entire distribution, there is less migration overall than expected cost-benefit calculations would suggest, because it is not known whether individuals will benefit from moving.
What MacKenzie means by “tears” is the emotional shock many of us feel when we move from one place to another. He describes the underlying dynamic as follows:
I think the bigger reason why people cry when they move but not when they decide to stay is because they can’t imagine what they’re giving up if they don’t move. It’s easy to visualize the losses that come with moving: not seeing current friends, not being able to go to their favorite restaurants, not being able to enjoy their favorite running trails. But it’s much harder to visualize the losses of not moving: friends in a new place that they’ll never meet, experiences in a completely new environment that they’ll never appreciate, and soon. Gabaix and Laibson (2017) argue that people have only noisy information about the future, and because of this, they act as if they have very myopic preferences and prefer the present, making it harder to predict the future. A similar idea might apply when considering the cues that individuals have about utility in different locations. They might have much more accurate cues about utility in their current location than in other locations, which might lead them to prefer not to move. Research on how consumers make purchasing decisions has discussed the following possibilities: Ignore opportunity costSo they sometimes don’t realize what they are giving up by choosing one purchase over another (Frederick et al. 2009). It can be especially easy to ignore the opportunity cost of not moving when it’s hard to imagine what you’re giving up.
I would like to summarize this issue. Some people are raised (or even born?) with the idea that major moves are expected at various points in their lives, education, and careers. But for many others, the idea of a major move requires real, deliberate action to create positive imaginations about how a long-distance move can improve their lives.
