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Local Information, Income Segregation, and Geographic Mobility

Author

Listed:
  • Bond Timothy N.

    (Department of Economics, Krannert School of Management, Purdue University, 403 W. State St., Lafayette, IN, USA, 47907)

  • Salisbury Laura

    (Department of Economics, York University, Toronto, Canada)

Abstract

We develop a model of migration in the face of geographic information asymmetries. Firms from a given city observe whether or not a local worker is a member of a disadvantaged local community, a negative indicator of productivity, but do not have this information for migrants to this city. With this knowledge, workers must decide whether to migrate and obscure information about their community of origin. Our model generates results consistent with recent trends in intergenerational mobility and internal migration as well as new predictions about the relationship between migrant outcomes and income segregation. We confirm these predictions using data from the U.S. census.

Suggested Citation

  • Bond Timothy N. & Salisbury Laura, 2018. "Local Information, Income Segregation, and Geographic Mobility," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 18(3), pages 1-17, July.
  • Handle: RePEc:bpj:bejeap:v:18:y:2018:i:3:p:17:n:7
    DOI: 10.1515/bejeap-2017-0314
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    References listed on IDEAS

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    3. Allison Shertzer & Randall P. Walsh, 2019. "Racial Sorting and the Emergence of Segregation in American Cities," The Review of Economics and Statistics, MIT Press, vol. 101(3), pages 415-427, July.
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    5. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
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    7. Raj Chetty & Nathaniel Hendren & Lawrence F. Katz, 2016. "The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment," American Economic Review, American Economic Association, vol. 106(4), pages 855-902, April.
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    More about this item

    Keywords

    migration; asymmetric information; income segregation;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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