Millennial movers: how young people choose where to live

Urban life and city amenities influence their choice of city more than economic conditions, a new study shows.

Many assume there are two simple factors that influence people’s decision to uproot and move to a new place of residence: employment and housing. But this may be just one part of the story for Generation Y.

Millennials don’t just move for a job, a new study by the American Institute for Economic Research (AIER) shows. Instead, around 70 percent of young college graduates decide where to relocate based on quality-of-life factors such as robust restaurant scene and good mass transit. Once a young person decides to move, urban life and city amenities influence their choice of city more than economic conditions.

“Just like the Dutch who settled in the Hudson Valley, the Irish who settled in Boston, or the Swedes and Norwegians who move to Minnesota and the Dakotas, these workers are moving to places with large populations of people just like themselves: young and educated,” wrote the authors of the report Top Job Destination for Young College Graduates.

“This is the single most important factor in explaining post-college destinations.”

Last year a study published in the journal Urban Studies suggested that employment and housing were the dominant factors in deciding where to relocate. Between 2005 and 2007, the study found that young, highly educated people were more likely to change location than any other segment of the population. While this continues to be true today, the new report suggests that there may be more behind young Millennials’ moving choices. 

AIER's Employment Destination Index ranks 260 metropolitan areas across the United States in an effort to tease out patterns about why young graduates flock to certain areas over others.

The study found that while large metropolitan areas such as New York, Los Angeles, Chicago, Washington, D.C., and Boston attract around 25 percent of young, well-educated movers, smaller cities such as Santa Cruz, Calif.; Ann Arbor, Mich.; Iowa City; and Bridgeport, Conn., are also popular destinations. These cities are attractive to Millennials because they balance economic opportunities with lower rents and amenities such as restaurants and bars. Twenty-somethings also are seeking out college towns, since universities can help prop up the economies of smaller metropolitan areas and provide cultural and social opportunities. 

While a city’s unemployment rate is the second most important factor that determines destination, the third most important factor is the accessibility of alternative transportation methods.

“The relative lack of car dependency reflects the values of a generation that is as comfortable on bike, on foot or in an unlicensed, crowd-sourced private car for hire summoned by smartphone,” the study’s authors reported.

The results of the study may not come as a surprise to Millennial watchers who have already noted that this generation, which is comprised of people in their teens to their early 30s, and which now makes up the largest percentage of America’s workforce, is motivated by a love of “authenticity” which makes “non-traditional” cities attractive.

In a recent Christian Science Monitor cover story, Monitor correspondent Stephanie Hanes looked at cities such as Cincinnati and Detroit, which are becoming increasingly attractive to Millennials. For example, Jen Horton opted to live in Baltimore instead of Washington, D.C., her city of employment. While Ms. Horton said the decision allowed her to save money on rent and utilities, the lower cost of living wasn’t the only reason she chose the Charm City.

“It was about finding a place that felt like somewhere: a community of which she could be a part, a place that she wouldn’t just step into to be carried along, like San Francisco or New York, but a place where her life and actions mattered,” wrote Ms. Hanes.

In general, the US population is highly mobile with around 25 to 28 million people moving each year between regions, states, and counties, the study found. But while economic factors continue to play an important role, Millennials demonstrate that cultural and social appeals can matter just as much, the study's authors say. 

“Traditional economic theory would predict that economic reasons are the primary motivators for movers, and all the more so for the young and well-educated,” the authors point out.

“Our analysis supports the cultural impression prevalent these days that members of the Millennial generation seek a work/life balance.”