Even if it meant signing on for a five-hour round-trip super-commute, millions of Americans fled their cramped apartments for greener, vaster pastures during the pandemic. Many have stayed there, enjoying their backyards, quiet mornings, and distance from the sky-high rents and loud neighbors they’d have found closer to the office.
Indeed, new Census data shows that the migration out of major metros like New York, San Francisco and Los Angeles is far from drying up, as Business Insider’s Aki Ito reported on Monday. For one, nearly 240,000 more people left New York than arrived last year.
But those movers are facing big problems if they were to lose the cushy jobs that allowed them to make the move, according to a new paper published by University of California—Berkeley economist Enrico Moretti and U.S. Census Bureau economist Moises Yi.
Making that kind of move can be a death knell for an early-career professional, found the National Bureau of Economic Research working paper, titled “Size Matters: Matching externalities and the advantages of large labor markets.”
Among workers whose companies shuttered between 2010 and 2017 (a group Moretti had been tracking), their fates diverged based on their location. Namely: People in small towns—typically smaller labor markets—were significantly less likely to nab a new job within a year than their big-city counterparts.
Small city dwellers were left having to either relocate or take a job that wasn’t in their area of interest or expertise; meanwhile, barely any major city dwellers had to consider relocating at all.
This fundamental truth isn’t a pandemic-era revelation. As Moretti wrote in the paper abstract, “economists have long hypothesized that large and thick labor markets facilitate the matching between workers and firms.”
But few workers, ostensibly, have gotten the message. A recent LinkedIn analysis found that the average distance of U.S.-based moves grew by nearly 17% from 2019 to 2022, and more people are moving. The bad news for those workers is that big cities are hardly yesterday’s news, and Moretti anticipates that they’re primed for a major comeback.
Better a plumber in a ‘brain hub’ than a small-town engineer
Moretti has been bullish on that point for a while now—certainly long before the pandemic. In his 2012 book The Geography of Jobs, he coined the term “brain hubs” to explain the enduring dominance of major metro areas when it comes to finding—and maintaining—a high-level career.
“Americans with high school degrees who work in communities dominated by innovative industries actually make more, on average, than the college graduates working in communities dominated by manufacturing industries,” Moretti wrote at the time.
Big-city workers who lose their jobs, Moretti found, have a far easier time getting new ones compared to their small-city counterparts. As he writes in his new paper, “the quality of the new worker-firm match is higher in larger markets, as proxied by a higher probability that the new match lasts more than one year; the new industry is the same as the old one; and the new industry is a ‘good fit’ for the worker’s college major.”
In other words, there’s a reason techies moved to San Francisco and financiers moved to New York in the first place, and just because remote jobs became the hot thing during the pandemic doesn’t mean those cities—with all their drawbacks—have lost their dominance.
That’s to say nothing of the fact that the availability of remote jobs—across industries—has been dropping off precipitously in recent years. That’s why being based somewhere like New York or L.A. is so crucial; being willing to show up to an office (which a Montana-based remote worker can no longer offer) is more and more likely to be a determining factor for a plum role.
Plus, as Ito pointed out in Business Insider, moving away from the city that’s a hub for your particular industry means you miss out on the informal connections that can be the building blocks of a well-networked career.
“Serendipitous conversations not only expand your professional network, they also create what economists refer to as ‘knowledge spillovers,’ helping you learn new stuff that’s relevant to your work,” Ito wrote, adding that rates of innovation (as measured by new patent filings) and productivity in larger cities typically outpace those in smaller towns.
All that considered, particularly now, when finding a job can feel completely impossible, it may make more sense to put up with smaller square footage in exchange for the ability to work among and alongside your industry peers—with the added benefit of staving off the doom loop.
