The ties that bind

Gregory Nemec

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What would you give to live near your family and friends? Probably more than you think.

Personal ties are the strongest factor when people make decisions about relocating—stronger than the lure of higher salaries, School of Management professor Olav Sorenson has found. And he has also put a price tag on those preferences. "We can see just what people are willing to give up to stay near family and friends," Sorenson says of his forthcoming study, which will appear in Social Forces. "What's surprising isn't the effect, but the size of the effect."

Sorenson and a professor from Denmark's Aalborg University combed through statistics about the moving patterns of Denmark's workers in 2002. The study focused on blue-collar workers, but the researchers found the same emphasis on home in a Danish study of workers with advanced degrees in science or engineering.

Financially, the tradeoff between support system and salary is huge. In order to lure a candidate, a job 40 miles from home had to pay about $9,500 more per year than a job 20 miles away. Even a recently laid-off worker preferred to stay close to home, unless the more distant job paid $11,000 over the average salary she could expect to earn.

The findings contradict classic assumptions that the jobless will always move to find work, Sorenson says—and they also imply that bringing jobs to pockets of unemployed residents could go further to reduce unemployment than policies that increase the number of jobs nationwide.

While the dollar values may seem steep, they reflect the truth of low relocation rates—less than 5 percent of the population during 2002–03—in both Denmark and the United States. "It's easy for us to forget, as academics, that the typical person in the United States doesn't move in their lifetime," Sorenson says. "Most people are born someplace, and they grow up there and live their lives there."