THE IMPACT OF LIVING COSTS ON GEOGRAPHIC-MOBILITY

During recent years, a small number of studies have generated indices of geographically comparable living costs for states. The first of these was by W. McMahon and C. Melton [6], who generated an index for 1977. G. Fournier and D. Rasmussen [3] then generated an index for 1980. The most recent, and by far the most sophisticated analysis and index construction, is by W. McMahon [5]. The purpose of this paper is to use the W.McMahon [5] data to investigate the impact of geographic living-cost differentials upon geographic mobility in the United States. In this study, we focus primarily (although not exclusively) upon the elderly. The reason for this focus is simple. First, the migration decision calculus for the elderly is likely to be somewhat simpler than it is for younger segments of the population. This largely reflects the fact that the labor force participation rate among the elderly is markedly lower than for younger age groups; as a result of this fact, labor market considerations per se are likely on average to not be of major significance in the elderly migration decision. Consequently, by essentially being able to ignore the labor market, we are able to more clearly focus in on the impact that living cost differentials per se presumably play in the elderly migration decision. Furthermore, the effective omission of an elaborate set of labor market variables diminishes the probability of potential econometric problems (such as multicollinearity). Next, since the elderly are a growing segment of the population, it becomes increasingly important for us to be able to understand and better forecast their migration (relocation) patterns. © 1993.