Income Migration and Income Convergence across U.S. States, 1995–2010

J. Matthew Shumway and Samuel M. Otterstrom

Growth and Change, 2015, vol. 46, issue 4, 593-610

Abstract: In this paper we examine how internal migration redistributes earned income across U.S. states between 1995 and 2010. We examine interregional income flows by first describing the movement of earned income between U.S. states. Second, we examine the effect of income migration on spatial patterns of income inequality. The question we ask is, “does migration increase or decrease convergence income across U.S. States?” A primary contribution of this paper is that instead of using only 1 year of income migration data to explore these issues, we use yearly data from the first year the Internal Revenue Service (IRS) data started including income (1995/1996) up to the most current data available (2009/2010). Results indicate that income convergence/divergence across states varies by whether or not there is general economic expansion or contraction. Nevertheless, some high-amenity states continually attract high-income households.

Date: 2015
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