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Why does birthplace matter so much?

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  • Bosquet, Clément
  • Overman, Henry G.

Abstract

We consider the link between birthplace and wages. Using a unique panel dataset, we estimate a raw elasticity of wages with respect to birthplace size of 4.2%, two thirds of the 6.8% raw elasticity with respect to city size. Part of this effect simply reflects intergenerational transmission and the spatial sorting of parents, part is explained by the role that birthplace size plays in determining current city size. Lifetime immobility explains a lot of the correlation between birthplace and current city size: we show that 43.7% of individuals only ever work while living in the place they were born. Our results highlight the importance of intergenerational and individual sorting in helping explain the persistence of spatial disparities.

Suggested Citation

  • Bosquet, Clément & Overman, Henry G., 2019. "Why does birthplace matter so much?," LSE Research Online Documents on Economics 100201, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:100201
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    3. Viktor Slavtchev & Michael Wyrwich, 2017. "TV and Entrepreneurship," Jena Economics Research Papers 2017-007, Friedrich-Schiller-University Jena.
    4. Stuart Donovan & Thomas de Graaff & Henri L. F. de Groot & Carl C. Koopmans, 2024. "Unraveling urban advantages—A meta‐analysis of agglomeration economies," Journal of Economic Surveys, Wiley Blackwell, vol. 38(1), pages 168-200, February.
    5. McNeil, Andrew & Lee, Neil & Luca, Davide, 2022. "The long shadow of local decline: birthplace economic conditions, political attitudes, and long-term individual economic outcomes in the UK," LSE Research Online Documents on Economics 113681, London School of Economics and Political Science, LSE Library.
    6. Raoul van Maarseveen, 2021. "The urban–rural education gap: do cities indeed make us smarter? [Educational investment responses to economic opportunity: evidence from Indian road construction]," Journal of Economic Geography, Oxford University Press, vol. 21(5), pages 683-714.
    7. Kenny, Michael & Luca, Davide, 2021. "The urban-rural polarisation of political disenchantment: an investigation of social and political attitudes in 30 European countries," LSE Research Online Documents on Economics 112683, London School of Economics and Political Science, LSE Library.
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    9. Buscha, Franz & Gorman, Emma & Sturgis, Patrick, 2020. "Spatial and Social Mobility in England and Wales: Moving Out to Move On?," IZA Discussion Papers 13437, Institute of Labor Economics (IZA).
    10. Felix Ehrenfried & Thomas A. Fackler & Lindlacher Valentin & Thomas Fackler, 2022. "New Region, New Chances: Does Moving Regionally for University Shape Later Job Mobility?," CESifo Working Paper Series 9922, CESifo.
    11. Bacolod, Marigee & De la Roca, Jorge & Ferreyra, María Marta, 2021. "In search of better opportunities: Sorting and agglomeration effects among young college graduates in Colombia," Regional Science and Urban Economics, Elsevier, vol. 87(C).
    12. Lee, Jun Yeong & Winters, John V., 2021. "Too Cold to Venture There? January Temperature and Immigrant Self-Employment across the United States," IZA Discussion Papers 14941, Institute of Labor Economics (IZA).
    13. McNeil, Andrew & Luca, Davide & Lee, Neil, 2023. "The long shadow of local decline: Birthplace economic adversity and long-term individual outcomes in the UK," Journal of Urban Economics, Elsevier, vol. 136(C).
    14. Luca, Davide & Terrero-Davila, Javier & Stein, Jonas & Lee, Neil, 2023. "Progressive cities: urban–rural polarisation of social values and economic development around the world," LSE Research Online Documents on Economics 118275, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    place of birth; spatial sorting; intergenerational transmission; lifetime mobility; ES/J021342/1; ES/G005966/1;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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