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Propensity score matching, a distance-based measure of migration, and the wage growth of young men

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  • John C. Ham
  • Xianghong Li
  • Patricia B. Reagan
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    Abstract

    This paper estimates the effect of U.S. internal migration on real wage growth between the movers' first and second jobs. Our analysis of migration differs from previous research in three important aspects. First, we exploit the confidential geocoding in the National Longitudinal Surveys of Youth 1979 (NLSY79) to obtain a distance-based measure. Second, we let the effect of migration on wage growth differ by schooling level. Third, we use propensity score matching to measure the effect of migration on the wages of those who move. ; We develop an economic model and use it to (i) assess the appropriateness of matching as an econometric method for studying migration and (ii) choose the conditioning variables used in the matching procedure. Our data set provides a rich array of variables on which to match. We find a significant effect of migration on the wage growth of college graduates of 10 percent and a marginally significant effect for high school dropouts of -12 percent. If we use a measure of migration based on moving across either county lines or state lines, the significant effects of migration for college graduates and dropouts disappear.

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    Bibliographic Info

    Paper provided by Federal Reserve Bank of New York in its series Staff Reports with number 212.

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    Date of creation: 2005
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    Handle: RePEc:fip:fednsr:212

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    Keywords: Wages ; Labor mobility;

    This paper has been announced in the following NEP Reports:

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