Why Do WFH Workers Move?

Interstate migration is a key measure of economic dynamism, as it reflects people’s ability to move to opportunity, adjust to local economic shocks, relocate based on preferences, and seek lower costs of living or higher wages.See Raven Molloy, Christopher L. Smith and Abigail Wozniak’s 2011 article, “Internal Migration in the United States,” in the Journal of Economic Perspectives, and Richard Hornbeck and Enrico Moretti’s 2024 article, “Estimating Who Benefits from Productivity Growth: Local and Distant Effects of City Productivity Growth on Wages, Rents, and Inequality,” in The Review of Economics and Statistics.

During the Great Recession (2007-09), interstate migration declined in the U.S. sharply and remained subdued during the 2010s. A large literature is devoted to understanding the underlying causes of this decline. A key hypothesis is that the primary reason individuals move is for job opportunities and that these job-related moves have become less important over time.See Ning Jia, Raven Molloy, Christopher Smith and Abigail Wozniak’s 2023 article, “The Economics of Internal Migration: Advances and Policy Questions,” in the Journal of Economic Literature, and Greg Kaplan and Sam Schulhofer-Wohl’s 2017 article, “Understanding the Long-Run Decline in Interstate Migration,” in the International Economic Review.

However, a recent working paper by Alexander Bick, Adam Blandin, Karel Mertens and Hannah Rubinton documents an increase in interstate migration following the outbreak of the COVID-19 pandemic.See Federal Reserve Bank of St. Louis Working Paper 2024-012A, “Work from Home and Interstate Migration,“ published in May 2024. (See the figure below.) Further, the working paper shows that much of this rise can be attributed to the growing share of workers that are doing their jobs from home.

Rate of Interstate Migration

SOURCE: Bick, Blandin, Mertens and Rubinton, 2024.

NOTES: The sample comprises adults ages 18-64 in civilian households who currently live in the U.S. and lived in the U.S. in the previous year. The dashed vertical line marks the year before the pandemic.

Even before the pandemic, work from home (WFH) workers were 50% more likely to move across states than commuters, as the working paper’s authors noted in a previous blog post. (See the figure below.) After the emergence of COVID-19, the share of workers working from home tripled, rising from 5% in 2019 to 15%  in 2022. A simple accounting exercise based on these statistics implies that the rise in WFH can account for 57% of the increase in interstate migration during this same period.

Rate of Interstate Migration by Work Status

SOURCE: Bick, Blandin, Mertens and Rubinton, 2024.

NOTES: The sample comprises adults ages 18-64 in civilian households who currently live in the U.S. and lived in the U.S. in the previous year. The dashed vertical line marks the year before the pandemic.

Given that the prior literature shows that the most common reason individuals move across states is for a job, this begs the question: If WFH employees are not attached to a specific location for their job, why are they moving? In this blog post, we examine the reasons that WFH workers give for moving across states and how their reasons for moving differ from commuters.

Available Data on Why People Move

For data on why people move, we turn to the Current Population Survey (CPS). Sponsored jointly by the U.S. Census Bureau and the U.S. Bureau of Labor Statistics, the CPS is a monthly household survey that asks people about hours worked, residency and type of work, among other topics.

We define a worker as “WFH” if they report the same number of hours worked remotely and in total. We define a worker as a “commuter” if the number of hours they report working is higher than the number of hours they worked remotely. In other words, commuters include hybrid workers, while remote refers to those who work full time from home. We do this to look at the difference between those who are truly detached from their location in terms of work versus those who are tied to a location because of their job. We define a worker as “nonemployed” if they are unemployed or not in the labor force.

We limited our sample to people who are ages 18 to 64, currently reside in the U.S. and did so in the previous year, are not in the military, live in permanent housing, and are in the first rotation of the CPS.The CPS interviews people for four months, leaves the sample for eight months, and reenters the sample for another four months. We limited our sample to people who are in the CPS for the first four months because it offers the most accurate account of a move in the previous year. If individuals move during the eight-month period, they are more likely to not be included in the sample for the second four months. For more information, go to the explanation under the “Subsequent Months’ Interviews” heading on this webpage.

To look at mobility, we combine the March CPS with the Annual Social and Economic Supplement (ASEC), which includes information on migration. We limited the sample to those who said they moved across states in the last year. Then, we looked at answers to the question “What was [your] main reason for moving to this house or apartment?” Unfortunately, the CPS has a small sample size compared with other surveys like the American Community Survey. We combine the March 2023 and March 2024 data to get a larger sample size. Still, the standard errors on some results are large.

Remote Workers vs. Commuters

The main results from our analysis are presented in the next figure, which plots the most important reason workers gave for moving to a different state as the share of movers of each worker type. The whiskers are 95% confidence intervals.

Primary Reason for Relocating to a Different State

SOURCE: Bick, Blandin, Mertens and Rubinton, 2024.

NOTES: The sample comprises adults ages 18-64 in civilian households who currently live in the U.S. and lived in the U.S. in the previous year. The whiskers represent 95% confidence intervals (only positive values are shown). With our sample selection, there were no WFH workers who reported moving across states due to retirement or education.

From the figure, we see that the main reason commuters move is for a job (36%).We include “new job or job transfer,” “to look for work or lost job,” “to be closer to work/easier commute” and “other job-related reason” in our job-related reasons for moving. This is consistent with prior literature that has found job opportunities to be the primary reason people give for moving. The second most common reason among commuters for moving is housing (23%) followed by family (15%), education (11%) and other (14%), which includes natural disasters, change of climate and health reasons.

In contrast, the main reason WFH workers move is for housing (44%). Surprisingly, a job was cited as the main reason for relocation by 29% of WFH movers; though smaller than the 35% among commuters, it is still important. We interpret this as individuals deciding to move to a new location because they now have a WFH job that allows them to do so. WFH workers are also more likely to say they are moving for family (20%) than commuters.

People who are unemployed or not in the labor force (nonemployed) are more likely to move for retirement, family or other reasons than commuters or WFH workers are. The nonemployed group includes both retirees and full-time students.

Moves for Housing, Family More Common among Those Employed Remotely

Our findings show that relative to commuters, remote workers are more likely to relocate for reasons related to housing or family, whereas commuters are primarily motivated by job opportunities. As such, we expect these workers will move to very different locations: Remote workers will seek out locations with more affordable housing, and commuters will seek out locations with higher wages. As the share of remote workers has increased substantially, this could imply substantial changes in population and the sorting of workers across space.

Notes

1. See Raven Molloy, Christopher L. Smith and Abigail Wozniak’s 2011 article, “Internal Migration in the United States,” in the Journal of Economic Perspectives, and Richard Hornbeck and Enrico Moretti’s 2024 article, “Estimating Who Benefits from Productivity Growth: Local and Distant Effects of City Productivity Growth on Wages, Rents, and Inequality,” in The Review of Economics and Statistics.
2. See Ning Jia, Raven Molloy, Christopher Smith and Abigail Wozniak’s 2023 article, “The Economics of Internal Migration: Advances and Policy Questions,” in the Journal of Economic Literature, and Greg Kaplan and Sam Schulhofer-Wohl’s 2017 article, “Understanding the Long-Run Decline in Interstate Migration,” in the International Economic Review.
3. See Federal Reserve Bank of St. Louis Working Paper 2024-012A, “Work from Home and Interstate Migration,“ published in May 2024.
4. The CPS interviews people for four months, leaves the sample for eight months, and reenters the sample for another four months. We limited our sample to people who are in the CPS for the first four months because it offers the most accurate account of a move in the previous year. If individuals move during the eight-month period, they are more likely to not be included in the sample for the second four months. For more information, go to the explanation under the “Subsequent Months’ Interviews” heading on this webpage.
5. We include “new job or job transfer,” “to look for work or lost job,” “to be closer to work/easier commute” and “other job-related reason” in our job-related reasons for moving.