Lauren Taylor
Urban Economics
2/24/13
Technical Presentation:
The Role of Race-ethnicity in Migration within the United States
[1] Background Information: The process of migration is largely affected by spatial differences in
economic opportunities. In the typical model explaining the movement of migrants, key factors include
wage levels, unemployment rates, distance, origin, destination, quality of life, housing cost disparities,
and personal characteristics of migrants such as age and education. It is also important to recognize the
effects of racial and ethnic background on migration in the United States today. One such model by
William H. Frey and Kao-Lee Liaw analyzes the role that race-ethnicity plays in migration within the
United States.
[1.1] Focus of Frey and Liaw's study: Frey and Liaw's study focuses on analyzing interstate
migration. In their model, Frey and Liaw assess the role of cultural constraints in migrants' departure
and destination choices. Cultural constraints have an impact on migrants' choices because of migrants'
needs for social support networks, kinship ties, and access to informal employment opportunities that
arise from within cultural communities. Frey and Liaw additionally analyze the impact of low-skilled
immigration on domestic out-migration from urbanized, high-immigrant states.
[1.2] Initial conclusions: In their analysis of interstate migration of young adults between 1985 and
1990, Frey and Liaw conclude that the presence of communities of same-race residents reduces outmigration and attracts Hispanics, Asians, and blacks, particularly those who are foreign-born, who are
choosing a destination to move to. This cultural constraints argument implies that states with high
same-race concentrations should be major destinations for migrants. Furthermore, in considering the
recent dispersion of minorities, Frey and Liaw suggest that the theory of spatial assimilation may also be
at play in addition to the cultural constraints theory.
[1.3] Evidence of cultural constraints and spatial assimilation from Frey and Liaw's previous
studies: Immigrant minorities typically follow well-worn migration patterns that are shaped by racial and
ethnic attachments and migration networks. These traditional patterns are often motivated by
employment opportunities and social support provided by networks of individuals of similar
backgrounds. Interestingly, research also shows that the attractiveness of same-race neighbors is
decreasing among more well-educated and well-off blacks. Instead, these individuals choose to relocate
1
Lauren Taylor
Urban Economics
2/24/13
to more prosperous cities instead of traditional areas with large black concentrations. In such instances,
spatial assimilation may be occurring. Spatial assimilation involves individuals choosing to move to a new
location that is more economically advantaged and has a better quality of life instead of an area with large
residential concentrations of those individuals' same ethnic-race group. It is also interesting to note that
more assimilated, long-term residents show lower segregation in their housing decisions. Frey and Liaw
state that they anticipate the effects of cultural constraints on migration to be reduced somewhat by
spatial assimilation considerations. In particular, the presence of large, same race-ethnic residential areas
in a state will reduce residents' tendencies to leave the area; however, these patterns will be weaker for
more highly educated and native born, rather than foreign-born, members of these groups.
[1.4] Other factors in migration: In previous studies, Frey and Liaw find that the influx of low-skilled
immigrants into a state causes an outflow of low-skilled domestic migrants to neighboring states.
Migrants' decisions to leave a state when there is an influx of immigrants is more common for low-skilled
and poor whites than for any another race and ethnic group. Increasing housing prices in highimmigration states also causes out-migration and middle-class flight. Figure 1 shows that states that gain
the most foreign immigrants are also the states that lose the most domestic migrants. Conversely, states
that gain the most domestic migrants are not among the states that gain the most immigrants.
Additionally, Hispanic and Asian populations are much more concentrated in the United States than
those of whites and blacks. 70% and 60% of the nation's population of Hispanics and Asians,
respectively, reside in five states, while only about 30% of whites' and blacks' total populations live in five
states.
2
Lauren Taylor
Urban Economics
2/24/13
[1.5] Education as an indicator of migration: College graduates are more likely to migrate than
individuals who are less educated. Additionally, college graduates choose to move to different locations
than those without college degrees. For example, California is a top destination for college graduates
while neighboring Arizona and Nevada are top gainers of individuals with high-school educations or
lower. Frey and Liaw also noted that college graduates have more focused destinations while people
with lesser educations are far more dispersed across the United States. However, members of both
groups generally tend to choose southeastern destinations.
[2] Modeling Interstate Migration: To conduct their research, Frey and Liaw fit a two-level nested
logit model to a highly disaggregated table generated from the 5 percent Public Use Microsamples of the
2000 U.S. Census. Using a two-level model enabled them to separately determine how origin area and
personal characteristics affect departure decisions and how destination area and personal characteristics
affect migrants' destination choices. When looking at area attributes of a given location, Frey and Liaw
put particular emphasis on observing the impacts of cultural constraints, spatial assimilation, and
middle-class flight. The overall goal of their analysis is to determine the role that race-ethnicity plays in
out-migration and destination selection by observing interactions, or lack of interactions, between raceethnic categories and different area attributes.
[2.1] Area attributes considered include:











low-skilled, foreign-born immigration rate
total employment growth rate
service employment growth rate
unemployment rate
income
racial similarity
median housing value
distance to next state
contiguity to next state
coldness
population size of origin and destination location
[2.2] Personal characteristics considered include:

age
3
Lauren Taylor
Urban Economics







2/24/13
sex
race
education
poverty status
place of birth
state of residence in 1995
state of residence in 2000
[3] The model: A two-level nested logit model was used in Frey and Liaw's analysis. In this model, a
given potential migrant has personal attributes, s, and lives in state, i. Migration behavior depends on
departure probability, P(s, i), in the departure submodel and a set of destination choice probabilities,
P(j|s, i) for all j ≠ i, in the destination choice submodel. These probabilities become functions of
observable explanatory variables in the two submodels below.
the inclusive variable defined in (3) reflects the attractiveness of the rest of the system from the
perspective of the potential migrant with personal attributes, s, and living in state, i, in 1995.
4
Lauren Taylor
Urban Economics
2/24/13
[3.1] Model details: In this model, unknown coefficients in equations (1) and (2) are estimated by the
maximum quasi-likelihood method. The dummy variables that represent personal characteristics are
entered into each submodel as interactions with the variables that represent area attributes. The farther
away from zero, either negatively or positively, the resulting coefficient is, the more responsive the
personal characteristic is to the area attribute in question. Furthermore, these interactions are used to
determine if a given variable has a significant effect on each of the racial categories of migrants. The
two submodels described above indicate the probability of departure and destination selection given
certain personal and area characteristics. Of equal, if not greater, importance in this study are the Rhosquare calculations. These Rho-squares are used to determine the goodness of fit of a given
specification of the submodel and the equation as follows:
Rho-squares are particularly useful in determining the importance of a given subset of explanatory
variables against another subset. To do this, each subset is deleted in turn from the specification and the
resulting decreases in Rho-squares are then compared. A greater decrease in Rho-square indicates that
the deleted subset of variables, for example racial similarity, is of greater importance.
[4] Importance of findings and implications: This model is important because it helps develop an
understanding of the effect of race-ethnicity on individuals' movement choices across labor markets.
Immigration and its effects on the U.S. economy are important to study now more than ever because of
the increased immigration of individuals to the United States in the past several decades. Furthermore,
individuals across different races and ethnicities have different preferences and thus may act differently
than the population as a whole. Thus, traditional labor market migration models no longer adequately
explain migration across labor markets. With the United States becoming even more racially and
ethnically diverse, a model such as Frey and Liaw's that incorporates race-ethnicity in its analysis of
domestic migration patterns is necessary.
Frey and Liaw's model found that cultural constraints reduce out-migration from places with
large same-race concentrations, but contrary to Frey and Liaw's hypothesis, this result is not affected by
5
Lauren Taylor
Urban Economics
2/24/13
the education level of migrants. Therefore, the departure submodel does not follow the expected spatial
assimilation model. Additionally, it was determined from the data that both high low-skilled
immigration rates and median housing values promoted out-migration for all race-ethnic groups but
particularly affected those who had less than a college-level education. Furthermore, individuals who are
older, less-educated, non-poor, and born in the state they live in are less likely to move. Lastly, the Rhosquares indicate that migrant departure can be explained more by the racial similarity of a given area
than by the labor market variables or housing value there.
Frey and Liaw found that both the cultural constraints model and spatial assimilation affect
migrants' destination selection. In other words, migrants of a particular race-ethnic group are more
attracted to areas with large concentrations of others in their ethnic group, and especially attracted if
these migrants' have only a high-school education or less. Furthermore, high low-skilled immigration
rates and housing values act to dissuade worse-educated migrants when selecting destinations.
Additionally, areas with increasing total employment growth rates and income per capita attract
migrants. The Rho-square calculations indicate that areas of racially similar composition (Rho-square of
0.0059) play a more important role than the roles of climate or housing prices. However, together
immigration and labor market variables have a greater impact than the effect of racial similarity (the joint
Rho-square value is 0.0101). Thus, when determining a location to move to, migrants largely value not
only racial composition but also immigration rates and other labor market variables in their decision.
[5] Possible extensions: The racial composition of the United States has changed quite drastically in
the past several decades. Thus, it is important to adjust traditional economic models, such as the one
describing migration patterns, to incorporate the effect that race-ethnicity plays in these models.
Furthermore, the immigration debate has emerged in the news and in public policy as an important issue
in the past few years. Frey and Liaw's study of the impact of race-ethnicity, in addition to other factors,
on migration patterns in the United States provides important additions to traditional models of
migration. However, because their study used data from 1995-2000, it is important to conduct further
studies which incorporate data from more recent years, particularly because annual immigration rates
have increased since 2000 (Migration Policy Institute, 2007). It is also important to analyze the impact
of race-migration patterns on the economies and social structures of both the communities that
migrants leave and move to. Studies analyzing the effects of race-ethnicity on local economies and
social structures will be useful in this discussion of migration within the United States.
6
Lauren Taylor
Urban Economics
2/24/13
Works cited:
Frey, William H. and Kao-Lee Liaw. "Migration within the United States: Role of Race-Ethnicity".
Brookings-Wharton Papers on Urban Affairs, 2005, pp. 207-262.
Migration Policy Institute. "Annual Immigration to the United States: The Real Numbers". 2007.
http://www.migrationpolicy.org/pubs/fs16_usimmigration_051807.pdf
7