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Title: Labor Market Frictions and Moving Costs of the Employed and Unemployed

Citation Type: Miscellaneous

Publication Year: 2018

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Abstract: This paper examines the role of labor market frictions and moving costs in explaining the migration behavior of US workers by employment status. Using data on low-skilled workers from the Survey of Income and Program Participation (SIPP), I estimate a dynamic model of individual labor supply and migration decisions. The model accounts for the fact that geographical moves are not random, and that workers may move for reasons unrelated to the labor market. My estimates show that moving costs are substantial, and that labor market frictions particularly inhibit movement of the employed. I use the model to study migration responses to local labor market shocks and to a moving subsidy. Workers' preferences for non-market amenities, coupled with substantial moving costs and employment frictions, grant market power to incumbent employers. This market power is most likely to exist in specialized industries where within-location job hopping is infeasible.

Url: https://tyleransom.github.io/research/movingCostsLMfrictions.pdf

User Submitted?: No

Authors: Ransom, Tyler

Publisher: University of Oklahoma

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Other

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