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On the Dynamics of Interstate Migration: Migration Costs and Self-Selection

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  • Christian Bayer
  • Falko Juessen

Abstract

This paper develops a tractable dynamic microeconomic model of migration decisions that is aggregated to describe the behavior of interregional migration. Our structural approach allows us to deal with dynamic self-selection problems that arise from the endogeneity of location choice and the persistency of migration incentives. Keeping track to the distribution of migration incentives over time has important consequences, because the dynamics of this distribution influences the estimation of structural parameters, such as migration costs. For US interstate migration, we obtain a cost estimate of somewhat less than one-half of an average annual household income. This is substantially less than the migration costs estimated by previous studies. We attribute this difference to the treatment of the dynamic self-selection problem.

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Bibliographic Info

Paper provided by University of Dortmund, Department of Economics in its series Discussion Papers in Economics with number 06_03.

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Length: 41 pages
Date of creation: Dec 2006
Date of revision:
Handle: RePEc:mik:wpaper:06_03

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Citations

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Cited by:
  1. Keisuke Kawata & Kentaro Nakajima & Yasuhiro Sato, 2013. "Analyzing the impact of labor market integration," Discussion Papers in Economics and Business 13-28, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  2. Andrew Sweeting, 2007. "Dynamic Product Repositioning in Differentiated Product Markets: The Case of Format Switching in the Commercial Radio Industry," NBER Working Papers 13522, National Bureau of Economic Research, Inc.
  3. Greg Kaplan & Sam Schulhofer-Wohl, 2012. "Understanding the long-run decline in interstate migration," Working Papers, Federal Reserve Bank of Minneapolis 697, Federal Reserve Bank of Minneapolis.
  4. Juessen, Falko & Linnemann, Ludger, 2012. "Identifying Regional Labor Demand Shocks Using Sign Restrictions," IZA Discussion Papers 6767, Institute for the Study of Labor (IZA).
  5. López Real, Joel, 2011. "Family reunification or point-based immigration system? The case of the United States and Mexico," Economics Discussion Papers 2011-27, Kiel Institute for the World Economy.
  6. Damba Lkhagvasuren, 2006. "Education, Mobility and the College Wage Premium," Working Papers, Concordia University, Department of Economics 14001, Concordia University, Department of Economics, revised Nov 2013.
  7. Nikolay Gospodinov & Damba Lkhagvasuren, 2011. "A Moment-Matching Method for Approximating Vector Autoregressive Processes by Finite-State Markov Chains," Working Papers, Concordia University, Department of Economics 11005, Concordia University, Department of Economics, revised 16 Dec 2011.
  8. Plamen Nenov, 2013. "Regional Mismatch and Labor Reallocation in an Equilibrium Model of Migration," 2013 Meeting Papers, Society for Economic Dynamics 565, Society for Economic Dynamics.
  9. Joel López Real, 2011. "Family reunification or point-based immigration system? The case of the U.S. and Mexico," Working Papers 2011/19, Institut d'Economia de Barcelona (IEB).
  10. Jordan Rappaport, 2012. "Why does unemployment differ persistently across metro areas?," Economic Review, Federal Reserve Bank of Kansas City, issue Q II.

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