Labour market· Housing· Intergenerational Centre Moving matters Housing costs and labour market mobility 6 June 2019 Lindsay Judge Making a move – to a new job, a new home or both – can be born of many things, and it is this complex topic of residential and job mobility that is the subject of this briefing note. While the received wisdom is that living standards gaps between different parts of the UK have widened over time, when it comes to moving for work across areas, we show that as a nation the rate at which we take up a new opportunity and change residence has fallen over time. This is especially true for younger age groups – a surprise finding given that young people are more likely to be graduates, non-UK born and private renters than in the past, changes that should have increased rather than decreased moves made for work. So what can explain the fall in job-plus-home mobility we observe? In this report, we focus on three possible economic explanations: First, we show that the ‘push’ of a lack of employment has diminished over time. Second, we explore whether the ‘pull’ of more buoyant areas has fallen apace: if the gap between earnings across local authorities has widened over time, the benefits to moving to better paying areas will have grown too. Again, however, we show this has not been the case. While the earnings uplift of moving local authority is often still very considerable, the difference in the average ‘wage premium’ achieved as a result of such a move has fallen since the turn of the century. Third, we consider whether changing housing costs have acted as a headwind or tailwind when it comes to moving area for work. We find the propensity of young private renters to move home and job has fallen by two-thirds between 1997 and 2018, and suggest that this partly reflects the fact that private rents have risen consistently faster in higher-paying areas of England. Rents have risen by almost 90 per cent in the highest-paying 30 per cent of local authorities over the past 20 years, compared to just over 70 per cent among the 30 per cent lowest paying places. As a result, not only has the earnings boost of moving to a more productive area diminished as a result of closing wage differentials; so, too, has the broader living standards uplift once housing costs are taken into account. With the evidence showing that efficiently matching with job opportunities is especially important for young people at the beginning of their working lives, the intergenerational implications of this briefing note are clear. While two of the reasons we identify that potentially explain the fall in job-plus-residence moves can be viewed as positive, our findings about the way that rising housing costs are determining the behaviour of younger renters in particular is a real cause for concern.