2011/01/01 by John Kennan, James R. Walker · 23 citations
Economics, Econometrics and Finance · Social Sciences · #Regional Economics and Spatial Analysis #Urban, Neighborhood, and Segregation Studies #Migration and Labor Dynamics
paper · doi:10.3982/ecta4657
This paper develops a tractable econometric model of optimal migration, focusing on expected income as the main economic influence on migration. The model improves on previous work in two respects: it covers optimal sequences of location decisions (rather than a single once-for-all choice) and it allows for many alternative location choices. The model is estimated using panel data from the National Longitudinal Survey of Youth on white males with a high-school education. Our main conclusion is that interstate migration decisions are influenced to a substantial extent by income prospects. The results suggest that the link between income and migration decisions is driven both by geographic differences in mean wages and by a tendency to move in search of a better locational match when the income realization in the current location is unfavorable.