Stuck in Place

Geographic mobility–the movement of people from place to place in response to changing job trends–had declined in the United States, which in turn contributes to the reduction in economic mobility. David Schleicher, a Yale University associate law professor, has written a paper arguing that this reduction is due to government regulations, including land-use regulations that make it expensive to move and occupational licensing that makes it expensive to enter new markets.

This is an important paper, partly because it gained the attention of media ranging from Slate to Reason Magazine, and partly because it documents in detail some things the Antiplanner has said for years.

In Best-Laid Plans, I wrote, “A researcher in England has found higher levels of unemployment among people who own their homes. But this is because Britain’s growth-management planning has made housing there the least affordable in the world. Such high-priced housing greatly increases the cost of moving and discourages people who own homes from relocating to a city with more jobs. To date, this effect is much weaker in the United States, but continued housing shortages could potentially reduce American mobility.”
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Most, if not all, of the regulations described by Schleicher are designed to benefit special interest groups, not society as a whole. Occupational licensing protects existing professionals in an occupation from newcomers. Land-use regulations benefit existing homeowners to the detriment of renters and homebuyers. Getting rid of these regulations will make America more mobile again.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

One Response to Stuck in Place

  1. CapitalistRoader says:

    Interesting paper. One of the other main points addressed in addition to land-use and and occupational licensing regulations was welfare: The expanded welfare state is paying people on the lower end of the economic scale to stay in their failing cities rather than move to more economically attractive areas as they would have in past decades. Related, it’s odd that there’s no mention of the Curley Effect:

    Good policies bring in resources and voters; bad ones keep them out. With the Curley effect, this result is reversed. When politicians seeking to stay in power use distortionary policies to force out their political opponents, the more elastic response renders bad policies more, rather than less, attractive.

    Which explains the monopoly Democrats have on most of the big, older cities except for New York City, which regularly has a transfer of power between the parties. I think one of the less mentioned reasons that Democrats are freaking out about this Friday’s transfer of power in the federal executive branch is that they were counting on a Democratic president to bail out the fiscally failing big blue states. According to the author, bailouts are counterproductive:

    Finally, taking a longer-term perspective, unless place-based subsidies fundamentally alter the structure of local economies, they [bailouts] ultimately encourage people to stay in declining places. It is not clear why the country as a whole or a state in particular should want residents to remain in, say, Atlantic City rather than move to the New York City suburbs, which would give them access to a better labor market.

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