Why Do Americans Move From Wealthy States to Poorer Ones? (BusinessWeek)

By Peter Coy                                                                         January 09, 2014

A few months ago, journalist Timothy Noah observed that Americans are moving away from opportunity. “Migration is not only declining but also tends to be away from places where, according to recent studies, young adults have the best chances of moving up the income scale,” he wrote in an article for Washington Monthlytitled “Stay Put, Young Man.”

Noah was onto something big, and the paradox hasn’t disappeared. Earlier this month, Atlas Van Lines released its annual survey of migration patterns. It showed net migration away from some rich states and into some poorer ones. Connecticut, New Jersey, and Delaware, three of the wealthiest states, were among the migration losers. Meanwhile, Tennessee and North Carolina, which have below-average per capita incomes, were among the big winners. (Texas, another, has roughly average income.)

Atlas Van LinesIn 2013, Americans moved out of richer states and into poorer states

True, the District of Columbia and New Hampshire, which have high incomes, gained immigrants. And people flocked to North Dakota, which is only a bit above average in income but is experiencing an energy boom.

Overall, though, it appears that high state incomes weren’t much of a lure to Americans last year. In his article, Noah dismissed some of the likely explanations. It’s not because the magnet states have more jobs. “Most Americans moving across state lines are relocating to places where they’re no more likely to find employment,” he wrote.

BLOG: Kentucky Might Not Be Such a Bad Place to Start a Moving Business After All

Nor are people leaving to escape taxes. “A Reuters report in February cast doubt on this hypothesis, pointing out that the rich typically stay put when state income tax rates rise,” Noah wrote.

A “far more plausible factor,” he concludes, is the high cost of housing in rich states, which is made worse by exclusionary zoning regulations and underinvestment in transportation infrastructure—the buses and rail lines that would get people from home to work.

GRAPHIC: America's Moving: Hello Texas, Bye-Bye Wyoming

Coy is Bloomberg Businessweek's economics editor.