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Title: Inter-Regional Migration and Labor Market Returns: A Semi-Parametric Approach

Citation Type: Miscellaneous

Publication Year: 2005

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Abstract: This paper explores the linkages between migration and labor market outcomes. It begins by developing a formal model that characterizes an individuals residential location decision (US state) as a function of tastes, migration costs, and potential earnings. We first clarify what can be learned about these decisions from data on migration patterns and earnings available in large-scale datasets (e.g., the US Census). This analysis extends existing identification results in the literature to a setting in which migration decisions are a function of not only earnings but also tastes and initial conditions (i.e., birth region). Second, we characterize a set of models that are identified under alternative restrictions on the general model of labor market sorting proposed herein. As a starting point, we focus on a baseline specification that is just-identified; this assures that it makes the maximum possible use of the information in the data without imposing additional restrictions. This baseline specification is considerably more flexible than the models that have been used in the existing literature to study inter-regional migration and labor market outcomes. The final part of this paper estimates this model using 1990 US Census micro data. Estimates demonstrate the ability of the framework to parse the observed US income distribution and migration patterns in ways that are informative about the relative roles of migration costs, amenities, and earnings in sorting behavior. Special attention is paid to the implications of the results for measuring returns to education.

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Authors: Timmins, Christopher; Bayer, Patrick

Publisher: Yale University

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Migration and Immigration

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