When boom turns to bust, is it better to hunker down and stay put or pull up stakes and move elsewhere? Move appears to be the answer.
"We find that geographic mobility following the bust is associated with stronger consumer financial health," say researchers at the Federal Reserve Bank of Cleveland. The researchers examined the credit records of people living in counties experiencing oil rig boom and bust between 2011 and 2014. The finances of movers and stayers were similar during the boom times, but they diverged in the bust. Those who left ended up better off financially than those who stayed (lower credit utilization, fewer derogatory accounts, lower past-due balances, and greater access to credit). "Our analysis implies that geographic mobility could have quantifiable benefits for consumer financial health," they conclude.
Source: Federal Reserve Bank of Cleveland, Geographic Mobility and Consumer Financial Health: Evidence from Oil Production Boom Towns