Working Paper

Banking Regulation with Risk of Sovereign Default

Abstract: This paper shows the declining trend in internal migration in the United States is primarily due to increasing home attachment in “fast locations,” areas with relatively high rates of population turnover. These locations were population growth destinations in the 20th century, with transient populations that settled as regional population growth converged. The qualitative patterns of the U.S. experience can be generated by a model of location choice in heterogeneous regions with overlapping generations when the population has a home bias that varies endogenously with the history of population change. Using a novel measure of home attachment, this paper estimates a structural model of migration that distinguishes moving frictions from home utility. Simulations quantify channels of the mobility decline. Rising home attachment accounts for much of the decline, predominantly in fast locations. Population aging explains most of the remainder but in a more spatially neutral way.

JEL Classification: J61; R23; R11; C50;

https://doi.org/10.21799/frbp.wp.2026.25

Bibliographic Information

Provider: Federal Reserve Bank of Philadelphia

Part of Series: Working Papers

Publication Date: 2026-05-11

Number: 26-25

Note: Supersedes 19-49/R