Full Citation

Title: If I Leave Here Tomorrow: An Option View of Migration When Labor Market Quality Declines

Citation Type: Journal Article

Publication Year: 2018

ISBN:

ISSN: 00384038

DOI: 10.1002/soej.12249

NSFID:

PMCID:

PMID:

Abstract: In this article, we provide a framework for determining when it is optimal to move when labormarket opportunities are declining. We model the decision to migrate as akin to owning afinancial option in which the exercise price is the fixed cost of moving. We show that a higherfixed cost associated with moving and a higher standard deviation of the quality of the labormarket reduce the incentive to migrate. We then empirically examine whether the standarddeviation of indicators of labor market quality reduce the likelihood of migration. Our findingsstrongly support this hypothesis, and imply that for the relatively mobile population of high-skilled workers the counterfactual outmigration rates that would obtain if future labor-marketquality were known with certainty are more than twice observed rates.

Url: http://doi.wiley.com/10.1002/soej.12249

User Submitted?: No

Authors: Gardner, John; Hendrickson, Joshua R.

Periodical (Full): Southern Economic Journal

Issue: 3

Volume: 84

Pages: 786-814

Data Collections: IPUMS USA

Topics: Migration and Immigration

Countries: United States