Big city exodus risks career stagnation, study finds

NEW YORK, UNITED STATES — When the pandemic hit, a huge wave of Americans decided to ditch life in the big city. Seeking lower costs and a slower pace, they traded urban apartments for homes in smaller towns and suburban areas. But an eye-opening new study suggests those who fled may have jeopardized their career trajectories in the process.

The research by economist Enrico Moretti of UC Berkeley found that workers in smaller job markets struggled more to find new employment after being laid off compared to those in major urban centers. As reported by Business Insider, Moretti’s analysis showed:

“Those who lived in small labor markets were less likely to find a new job within a year than those in large labor markets. To get back on their feet professionally, those in small markets were more likely to be forced to relocate for employment.”

Agglomeration benefits careers

The findings underscore why professionals have long clustered in major cities and industry hubs. Known as “agglomeration” in economic terms, this clustering effect creates deep labor pools that benefit both workers and employers.

For example, a coder specializing in artificial intelligence (AI) has far more opportunities in the San Francisco Bay Area’s tech hub than most other regions. 

“The big takeaway is that market size matters. It’s clear that larger markets improve the quality of the match,” Moretti said.

Beyond more job options, urban professionals also gain from knowledge sharing and networking that occurs more organically in dense industry clusters.

Remote work fading?

The pandemic’s normalization of remote work initially seemed to decouple careers from geography. But as more companies pull back on allowing permanent remote work, the location risks for those who left cities are becoming clearer.

Moretti believes the urban exodus is likely temporary, predicting talent will again concentrate in major hubs as remote work fades:

“I never thought this was going to be a permanent change in the geography of labor… It’s more a matter of when than if.”

While some may accept lesser career prospects for a different lifestyle, the study suggests urban professionals who left may eventually need to return to safeguard future job prospects.