4 ms·

The rapid rise in dual-income households goes unnoticed, despite being inordinately important to this question. Intergenerational caretaking (of parents/grandp

by mapt 13y ago

The rapid rise in dual-income households goes unnoticed, despite being inordinately important to this question. Intergenerational caretaking (of parents/grandparents, or of children/grandchildren) goes unnoticed. Overall labor participation (an inverse first-choice proxy for Actual Real-Life Unemployment) isn't broken out as a term. The incredible rise in housing prices relative to stagnant or falling early-career wages (and the fact that much of the country is paying off their housing at the lower prices of mortgages made decades in the past) isn't broken out as a term.

pash 13y ago
"The authors explore several competing explanations to the joint declines in residential and labor market mobility, including changes within the housing market, the decline in higher paying manufacturing jobs, the polarization of the job market, and the rise of dual-career households, but find little empirical support for them."
- 001sky 13y ago
  This intuitively is flawed. If you offer me more money in a place with expensive housing, the decision is based on the joint NPV(x|y) wher x is an income vector and y is a cost vector. Likewise, a single job offer is going to be only 1/2 of the x vector. On its faces, a new job offer for a two income household stream would be 1/2 as implactful as under a 1 income scenario. That is not even counting doing the joint probability of x=xa+xb when xb has to change because xa'=/=xa. These variables are also non-observable, so without actually reading the study its implausible to consider them well accounted for IMHO. Similarly, there is a lot of technical overhead when dealing with housing costs in relation to work opportunities. Each opportunity has to be considered in relation to the balance sheet, not the income stream. Most 100k jobs lose 30k to taxes and 30k to expenses each year (at a minimum) netting 30k of savings. But many US metro's where 100K jobs are prevealent have homes with average prices edging north of 10x 100k. So, that is 30 years of net saving--a hugely consequential trajectory for a NAV calculation. So, if you have assets invested in a hot housing market, it will take more than just a good job offer in another area to get you to move. because moving reduces your exposure to a market that is equally if not more consequential to your NAV than your Job. Unlike the stock market, you can't just keep the same portfolio of residential RE as you move about.
- danieltillett 13y ago
  How do they control for this - is this a case of no evidence = not important?
001sky 13y ago
This raises really good points. a dula income move is much harder. and less likely to be done on spec. combine that with the real-estate inflation which has eaten up much of any surplus from regional wage variations--and you have yourself what is likely an 80% explanation.
x0x0 13y ago
look at table 4 in the paper ( available for free here http://www.scribd.com/doc/219732275/99907-w20065 http://www.scribd.com/doc/219732275/99907-w20065 ; pg 35). The authors say, "As a proxy for two-career households, we create an indicator for households where both spouses are employed in a professional or technical occupation." That addresses the dual-income question, though I think it fails to address it adequately. The authors show that intra-state migration fell both for couples both employed and even attempts to break out prof/tech and college degree requiring employment. Nonetheless, the base year is 1981-89, and I think (even attempting to call it technical employment) that this is possibly long enough ago -- at least 25 years -- that the nature of women's employment has changed. Perhaps the nature of work of secretaries is more homogenous, less value-adding, or easier to find as compared to senior engineering leads? So as women became more the latter than the former, perhaps this doesn't control. To the authors' point, though, this isn't a big enough fraction of the population to skew their results. That is, while the situation may well suck for dual-earner professional households, there aren't that many.
dba7dba 13y ago
I completely agree dual-income households are much less likely to move. I know of a family where one works for Toyota (just announced moving from California to Texas) and the other one works also at a pretty good job. Now that Toyota announced they will move to Texas, will the family move to Texas? If the family moves to Texas one is giving up a secure job with no promise of finding another one in Texas. Not to mention having to leave their family/friends behind.
ThomPete 13y ago
If you think dual-income houshold are problematic then thats nothing compared to divorced/2nd marriage housholds. That actually makes you much less likely to move.

by mapt 13y ago

pash 13y ago

"The authors explore several competing explanations to the joint declines in residential and labor market mobility, including changes within the housing market, the decline in higher paying manufacturing jobs, the polarization of the job market, and the rise of dual-career households, but find little empirical support for them."

001sky 13y ago
This intuitively is flawed. If you offer me more money in a place with expensive housing, the decision is based on the joint NPV(x|y) wher x is an income vector and y is a cost vector. Likewise, a single job offer is going to be only 1/2 of the x vector. On its faces, a new job offer for a two income household stream would be 1/2 as implactful as under a 1 income scenario. That is not even counting doing the joint probability of x=xa+xb when xb has to change because xa'=/=xa. These variables are also non-observable, so without actually reading the study its implausible to consider them well accounted for IMHO. Similarly, there is a lot of technical overhead when dealing with housing costs in relation to work opportunities. Each opportunity has to be considered in relation to the balance sheet, not the income stream. Most 100k jobs lose 30k to taxes and 30k to expenses each year (at a minimum) netting 30k of savings. But many US metro's where 100K jobs are prevealent have homes with average prices edging north of 10x 100k. So, that is 30 years of net saving--a hugely consequential trajectory for a NAV calculation. So, if you have assets invested in a hot housing market, it will take more than just a good job offer in another area to get you to move. because moving reduces your exposure to a market that is equally if not more consequential to your NAV than your Job. Unlike the stock market, you can't just keep the same portfolio of residential RE as you move about.
danieltillett 13y ago
How do they control for this - is this a case of no evidence = not important?

001sky 13y ago

This raises really good points. a dula income move is much harder. and less likely to be done on spec. combine that with the real-estate inflation which has eaten up much of any surplus from regional wage variations--and you have yourself what is likely an 80% explanation.

x0x0 13y ago

look at table 4 in the paper ( available for free here http://www.scribd.com/doc/219732275/99907-w20065 http://www.scribd.com/doc/219732275/99907-w20065 ; pg 35). The authors say, "As a proxy for two-career households, we create an indicator for households where both spouses are employed in a professional or technical occupation." That addresses the dual-income question, though I think it fails to address it adequately. The authors show that intra-state migration fell both for couples both employed and even attempts to break out prof/tech and college degree requiring employment. Nonetheless, the base year is 1981-89, and I think (even attempting to call it technical employment) that this is possibly long enough ago -- at least 25 years -- that the nature of women's employment has changed. Perhaps the nature of work of secretaries is more homogenous, less value-adding, or easier to find as compared to senior engineering leads? So as women became more the latter than the former, perhaps this doesn't control. To the authors' point, though, this isn't a big enough fraction of the population to skew their results. That is, while the situation may well suck for dual-earner professional households, there aren't that many.

dba7dba 13y ago

I completely agree dual-income households are much less likely to move. I know of a family where one works for Toyota (just announced moving from California to Texas) and the other one works also at a pretty good job. Now that Toyota announced they will move to Texas, will the family move to Texas? If the family moves to Texas one is giving up a secure job with no promise of finding another one in Texas. Not to mention having to leave their family/friends behind.

ThomPete 13y ago

If you think dual-income houshold are problematic then thats nothing compared to divorced/2nd marriage housholds. That actually makes you much less likely to move.