Does interstate migration alter U.S. state-level income inequality? A paired origin-destination perspective

Reducing income inequality, making cities and settlements attractive, and ensuring quality education are three of Sustainable Development Goals (17 SDGs). Many scholars and policymakers have discussed and explored the determinants of income inequality in U.S. from different perspectives. However, as an important indicator to influence local income distribution, the mode of migration is rarely discussed. In addition, it remains unclear whether this inequality-migration nexus will be mitigated or intensified by education. Thus, this paper will utilize the bilateral migration data from the Internal Revenue Service of the U.S. from 1990 to 2018 to investigate the migration-inequality nexus. One additional concern is the moderating effects of migrant educational background, which would be the fundamental indicator of migration intentions. Finally, this study finds that interstate migration can significantly positively affect income inequality. More specifically, such income inequality would be exacerbated in the destination states because skilled workers are more likely to move to seek higher wages compared to unskilled workers. This finding echoes the existing theory of Skill-biased Technological Change (SBTC). Moreover, it found that the influences of interstate migration can differ in migrant demographic characteristics and the origin-destination locations.