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Location-Specific Human Capital, Location Choice And Amenity Demand

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  • Douglas J. Krupka

Abstract

The role of amenities in the flow of migrants has long been a subject of debate. This paper advances an original model of amenities that work through household production instead of directly through utility. Area characteristics (amenities) affect household production, causing certain kinds of human capital investments to be rewarded more than others. Area heterogeneity thus makes such investments location-specific. This specificity-along with a period of exogenous location-increases the opportunity costs of moving, diminishes migration flows between dissimilar locations and increases valuation of amenities that were present in the originating area. These theoretical results emphasize people's sorting across areas and thus differ from the results of the standard model of compensating differentials. Empirical tests of the model's predictions using NLSY79 data show that childhood investments affect migration flows in the way proposed by the model. Copyright (c) 2009, Wiley Periodicals, Inc.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Journal of Regional Science.

Volume (Year): 49 (2009)
Issue (Month): 5 ()
Pages: 833-854

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Handle: RePEc:bla:jregsc:v:49:y:2009:i:5:p:833-854

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Cited by:
  1. Enrico Moretti, 2008. "Real Wage Inequality," NBER Working Papers 14370, National Bureau of Economic Research, Inc.
  2. Klaus Nowotny, 2011. "Welfare Magnets, Taxation and the Location Decisions of Migrants to the EU," WIFO Working Papers 393, WIFO.
  3. Rickard Sandell, 2011. "The migration flux: Understanding international immigration through internal migration," Working Papers 2011-20, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
  4. Winters, John V, 2010. "Human Capital and Population Growth in Non-Metropolitan U.S. Counties: The Importance of College Student Migration," MPRA Paper 25592, University Library of Munich, Germany.

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