Do poorly funded pensions affect migration to states?

A new study from the Center for Retirement Research at Boston College finds that poorly funded public pensions and negative publicity about them could be a factor in people’s decisions to move from one state to another:

“Past research has found that individuals are more likely to move to places with the best “bundle” of amenities and opportunities…More recently, unfunded pension liabilities have raised concerns about jurisdictions’ ability to manage their finances, as an increasing portion of today’s taxes must be used to cover past shortfalls and future taxes may end up being higher as well.”

Ultimately, the study found that the condition of public pensions would represent at most a small piece of a family’s decision to relocate. But, as the website MarketWatch observes:

While it is difficult to imagine that a state’s pension underfunding factors directly into a potential mover’s calculus, it is possible that negative media coverage of state finances could influence decisions on where to move. And the effect of unfunded pension liabilities is small; at most, it can be seen as one factor among many that collectively inform and motivate decisions to move.

The interesting news here, however, is that pension underfunding seems to matter.

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