Migration and the Regional Redistribution of Nonearnings Income in the United States: Metropolitan and Nonmetropolitan Perspectives from 1975 to 2000

Abstract

Many advanced economies have an aging population that relies heavily on government pensions, social security, and privately held investment-based income. In the United States the geography of social security and investment income (collectively called nonearnings income) is uneven. Furthermore, the ways in which migration serves to redistribute such income across space remain unstudied. This paper highlights regions in the United States that are becoming increasingly attractive to nonearnings income through migration. Overall, there is a consistent Rustbelt-to-Sunbelt shift in nonearnings income due to migration. These income shifts, however, are quite distinct between metropolitan and nonmetropolitan areas. Starting in the late 1980s, nonmetropolitan portions of the Rustbelt enjoyed net gains in nonearnings income through migration processes. Therefore, it appears that the migration systems which drew income away from the nonmetropolitan north during the 1970s are now shifting to some degree. Analysis further indicates that migration contributes to greater levels of economic disparity across space. Whereas flows of social security income are highly influenced by the aggregate level of migration, flows of investment income are more influenced by differentials in migrants' per capita income levels. Regions such as the Plains are attracting migrants with relatively low per capita nonearnings income whereas the Rocky Mountain and New England regions are attracting individuals with high per capita income. Destinations such as the Rocky Mountains and New England are likely to enjoy significant economic benefits as new sources of income arrive which are tied to migration, but the Plains region is left with less-well-off populations, which pose significant social and economic problems in such sending regions. As the population in the United States and other advanced economies ages, these processes of nonearnings income migration become increasingly important in shaping local and regional economic conditions.