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Self-Selection and the Returns to Geographic Mobility: What Can Be Learned from the German Reunification "Experiment"

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Author Info
Anzelika Zaiceva () (IZA Bonn)
Abstract

This paper investigates the causal effect of geographic mobility on income. The returns to German East-West migration and commuting are estimated, exploiting the structure of centrally planned economies and a "natural experiment" of German reunification for identification. I find that the migration premium is insignificantly different from zero, the returns for commuters equal to 40 per cent, and the local average treatment effects for compliers are insignificant. In addition, estimation results suggest no positive self-selection on unobservables for migrants, and some evidence of positive self-selection on unobservables for commuters.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2524.

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Length: 31 pages
Date of creation: Dec 2006
Date of revision:
Handle: RePEc:iza:izadps:dp2524

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Related research
Keywords: returns to migration; causality; treatment effects;

Find related papers by JEL classification:
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
R23 - Urban, Rural, and Regional Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Heckman, James J, 1990. "Varieties of Selection Bias," American Economic Review, American Economic Association, vol. 80(2), pages 313-18, May.
  2. Mitali Das & Whitney K. Newey & Francis Vella, 2003. "Nonparametric Estimation of Sample Selection Models," Review of Economic Studies, Blackwell Publishing, vol. 70(1), pages 33-58, January.
  3. M. Burda & W. Härdle & M. Müller & A. Werwatz, . "Semiparametric Analysis of German East-West Migration Intentions: Facts and Theory," Sonderforschungsbereich 373 1998-3, Humboldt Universitaet Berlin.
    Other versions:
  4. Bird, Edward J. & Frick, Joachim R. & Wagner, Gert G., 1998. "The Income of Socialist Upper Classes during the Transition to Capitalism: Evidence from Longitudinal East German Data," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 211-225, June. [Downloadable!] (restricted)
  5. Jennifer Hunt, 1999. "Post-Unification Wage Growth in East Germany," NBER Working Papers 6878, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. Richard B. Freeman & Lawrence F. Katz, 1995. "Differences and Changes in Wage Structures," NBER Books, National Bureau of Economic Research, Inc, number free95-1, April.
  7. Burda, Michael C., 1993. "The determinants of East-West German migration: Some first results," European Economic Review, Elsevier, vol. 37(2-3), pages 452-461, April. [Downloadable!] (restricted)
    Other versions:
  8. Pagan, Adrian & Vella, Frank, 1989. "Diagnostic Tests for Models Based on Individual Data: A Survey," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(S), pages S29-59, Supplemen. [Downloadable!] (restricted)
  9. Michael C. Burda & Jennifer Hunt, 2001. "From Reunification to Economic Integration: Productivity and the Labor Market in Eastern Germany," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(2001-2), pages 1-92. [Downloadable!]
  10. Andrews, Donald W K & Schafgans, Marcia M A, 1998. "Semiparametric Estimation of the Intercept of a Sample Selection Model," Review of Economic Studies, Blackwell Publishing, vol. 65(3), pages 497-517, July. [Downloadable!] (restricted)
  11. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-53, September. [Downloadable!] (restricted)
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  12. Barry Chiswick, 1999. "Are Immigrants Favorably Self-Selected?," American Economic Review, American Economic Association, vol. 89(2), pages 181-185, May. [Downloadable!] (restricted)
  13. Jennifer Hunt, 2006. "Staunching Emigration from East Germany: Age and the Determinants of Migration," Journal of the European Economic Association, MIT Press, vol. 4(5), pages 1014-1037, 09. [Downloadable!] (restricted)
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