SHOULD I STAY
or SHOULD I GO?
Compared with the 1990s, fewer
young college graduates are choosing
to move out of state for employment
by STAN AUSTIN
When Anirmend Battulga graduated in 2023 from the University of Colorado Denver, he had choices to make. With a bachelor’s degree in Electrical Engineering in hand, the Denver native considered employment options beyond his home state.
Although it wasn’t a difficult decision in the end, Battulga weighed the options and chose not to relocate, at least not now. He decided to accept a position as an estimator with a contracting firm in nearby Aurora, where his family resides.
“The biggest decision is cost of living,” Battulga said. “I’ve been living with my parents, trying to save money. I wanted to stay here in Colorado. If I relocated, I’d have to, in a sense, start all over.”
The decisions that young college graduates face regarding whether to migrate out of state for employment are not new. However, compared with the 1990s, graduates in recent years appear less likely to move out of state.
The Kansas City Fed explored that trend, the factors behind it and related topics in a September 2024 Research Working Paper titled “Should I Stay or Should I Go? Interstate Mobility and Earnings Gains of Young College Graduates.” The paper’s authors, Andrew Glover and José Mustre-del-Río, investigated how the relationship between interstate mobility, labor market returns from moving, and initial wealth have evolved over time.
They found that in the late 1990s, nearly 7% of young college graduates moved across state lines every year.
“These workers enjoyed 30 percent higher earnings three years after moving relative to similar stayers, but their gains were not immediate, amounting to only 7% in the first year post-move,” Glover and Mustre-del-Río wrote.
By the mid-2010s, mobility had fallen by more than half, to 4.2%, and average earnings gains among movers fell and became more front-loaded. At the same time, debt increased among all young college graduates. These changes took place concurrent with worsening labor market prospects and financial conditions upon entering the labor market.
Broader trends
Mustre-del-Río said that the decline in interstate mobility for young college graduates appears to be part of a broader shift.
“There’s a sense in economics, at least in the U.S., that there’s this declining mobility or declining dynamism,” Mustre-del-Río said. “Part of that mobility pertains to interstate mobility. It does look like, over time, people are just moving less and less.”
One hypothesis about that trend asserts that many cities in the United States have become more and more similar, perhaps lessening the appeal of relocation for some individuals.
“So the benefit or the trade-off of moving from one place to the next might be smaller than it used to be,” Mustre-del-Río said.
The Kansas City Fed study utilized a data model that identified four main factors behind the changes in interstate mobility since the 1990s:
• Changes in the present value of earnings from moving.
• Changes in the timing of earnings gains.
• Changes in wealth upon entering the labor market.
• Changes in the disutility or undesirable effects from moving.
After graduating from Rockhurst University, Mara Roudebush chose to remain in Kansas City, where she works in advertising and marketing. Photo by Gary Barber
After graduating from Rockhurst University, Mara Roudebush chose to remain in Kansas City, where she works in advertising and marketing. Photo by Gary Barber
University of Colorado Denver graduate Anirmend Battulga weighed his options and chose to remain in the state, working for a contracting firm in Aurora. Photo by Carl Bower
University of Colorado Denver graduate Anirmend Battulga weighed his options and chose to remain in the state, working for a contracting firm in Aurora. Photo by Carl Bower
Importantly, Mustre-del-Río said, previous industry studies related to worker mobility focused on earnings prospects in the first year or so after relocation. The Kansas City Fed study goes beyond that to include data on what happens with workers’ earnings and wealth gains in the years following a move.
“In particular what we end up finding is that back in the 1990s when people used to move more, it wasn’t so much that the gains that they got immediately upon moving were all that big, but really they accrued gains two and three years out,” Mustre-del-Río said. “That suggests that we need to think carefully when we’re trying to understand why people move. It not just that they were moving back then for that one-off gain, but for gains that accrued over time. And then, once you start thinking about the fact that these gains can accrue over time and that the payoff isn’t immediate, then you need to start thinking about things like wealth or debt or access to credit.”
The study examines the role that initial wealth plays in the mobility equation, pointing out that “the decline in mobility due to lower initial wealth leads to persistently lower income for workers who enter the labor force poor.”
Strong connections
For Battulga, the decision to remain in the greater Denver area had a lot to do with maintaining family and personal relationships without being “stressed” with moving to a different city.
“I think for my personal decision to stay with family (in Aurora), it was that it provided me the cushion to kind of reevaluate myself after college,” Battulga said.
Also, he said that not having to incur costs of relocating has allowed him to allocate funds toward other interests, such as traveling and investing. Still, he understands that situations can vary, especially when it comes to deciding to stay or leave.
“Some of my friends decided to stay with family because they couldn’t afford (to relocate) or they had some kind of student debt that they had to address first before moving out,” he said. “A lot of them lived with family and friends and grew up here…and at the same time they secured internships and work experience, so that by the time they graduated they had something lined up (in the state).”
“Some of my friends decided to stay with family because they couldn’t afford (to relocate) or they had some kind of student debt that they had to address first before moving out.”
In Kansas City, part of the Tenth Federal Reserve District’s western Missouri footprint, Des Moines, Iowa, native Mara Roudebush graduated from Rockhurst College in 2020 and works as a senior account manager for an advertising and marketing firm.
“The big thing for me was just the career opportunities (in Kansas City),” Roudebush said, noting that before her current role, her first job out of college was with a Kansas City-based advertising firm that is one of the largest in the world. “That was the original piece of it…having some companies based here who were really well-known across the country that I felt would provide a really good grounding for my career and give me the potential to move up and gain good experience.”
Roudebush said that her husband’s family is in the Kansas City area, “and just having some family and friends from college and his family here was a big part of me staying in the area and wanting to be around people that I knew and loved.”
For her peer group of college graduates—who were entering the job market in the first year of the COVID pandemic—she said it was “about 50/50,” with people who found jobs quickly tending to stay in Kansas City, and those who didn’t find work immediately tending to leave. Student debt was a factor in the decision-making for some of those graduates, she said, although federal
pandemic policies put a pause of most student payments.
For her, going to school in a large metropolitan area also made a big difference in the mobility decision.
“I wasn’t in a college town; I was in Kansas City, and that opened my eyes to a lot of opportunities and networking, and all of that was really accessible to me,” Roudebush said.
Personal investment
Christiana Rangel has been manager of Recruitment and Outreach in the University of Missouri-Kansas City’s School of Humanities and Social Sciences for five years and has seen many students remain in the area after completing their studies.
“I meet with a lot of students over time who do want to cross state lines, and lot of those conversations are about why they don’t (move),” Rangel said. “A lot of our students are first-generation college students, and there’s a lot that comes with that. A lot of students have familial responsibilities at home. So they could have some anxiety about ‘If I leave, who’s going to do that?’ Those are discussions that I have quite frequently.”
Rangel said that she also has observed that concern about potential costs of relocating, such as having to take out loans to do so, is another reason for young people deciding not to move.
Mustre-del-Río said that another way to consider the mobility decision is to see it as an investment decision, although every graduate won’t have the available wealth to do so without borrowing and thereby increasing debt.
“With this moving decision, especially for a job, it’s helpful to think about it as an investment for yourself, and to make an investment you need some upfront money,” he said.
Referring to the research findings, he said, “This is not just a story about ‘I’m moving to this place because I like it; I’m moving to this place in search of opportunity,’ and especially if the benefits from that opportunity come down the road, that’s going to affect people differently depending on how much money they have in savings. That’s a really big takeaway.”
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