Leaving a big city could have significant implications for your career, according to a new paper coauthored by Enrico Moretti, an economist at the University of California at Berkeley. Moretti’s research followed workers whose companies shut down between 2010 and 2017 and found that those who lived in smaller labor markets were less likely to find a new job within a year than those in larger labor markets.
The study also revealed that workers in smaller markets were more likely to be forced to relocate for employment and were also more likely to settle for a role that was misaligned with their college degree, or in an entirely different industry. Moretti’s conclusion is clear: market size matters. Larger markets improve the quality of the match between workers and companies.
This phenomenon, known as agglomeration, explains why workers and companies tend to cluster in the same cities. For instance, a coder specializing in AI is far more likely to find a job in San Francisco than anywhere else in the world, because there are a lot of AI-related companies there. And it’s because AI specialists flock to San Francisco that AI businesses set up shop there in the first place.
However, the mass migration from major cities to smaller, more affordable destinations continues. From mid-2022 to mid-2023, many big metropolitan areas continued to lose more people than they gained. New York lost 238,000 more people than it gained, while Los Angeles lost 155,000, San Francisco lost 54,000, and Seattle lost 25,000.
While the urban flight isn’t as severe as the crisis-level exodus we saw in the first year of the pandemic, hundreds of people continue to leave America’s greatest cities every day.
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