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Title: Education and Geographical Mobility: The Role of Wage Rents

Citation Type: Working Paper

Publication Year: 2019

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Abstract: Geographical mobility is known to be crucial to the adjustment of local labor markets. But there is severe inequity in the incidence of mobility: better educated Americans make many more long-distance moves. I argue this is a consequence of larger wage offer dispersion, independent of geography. In a thin labor market, this generates larger wage rents (in excess of workers' reservations) in new job matches, particularly for younger workers who are just beginning their careers. If an offer happens to arrive from a distant location, these larger rents are more likely to justify the cost of moving-even if the offer distribution is invariant geographically. Also, local job creation will elicit a larger migratory response. I motivate my claims with new evidence on mobility patterns and subjective moving costs. And I test my hypothesis by estimating wage returns to local and long-distance job matching over the jobs ladder. Though I focus on education differentials, this paper offers new insights for understanding geographical immobility more generally

Url: http://cep.lse.ac.uk/pubs/download/dp1616.pdf

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Authors: Amior, Michael

Series Title: CEP Discussion Paper

Publication Number: 1616

Institution: Centre for Economic Performance

Pages:

Publisher Location: London

Data Collections: IPUMS USA, IPUMS CPS

Topics: Education, Labor Force and Occupational Structure

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