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The Role of Education: Mobility Increasing or Mobility Impeding?

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  • Axel Borsch-Supan
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    Abstract

    This paper studies the influence of education on labor and geographic mobility. Mobility is an important equilibrating factor in a changing economy. Therefore, any factor that induces mobility also alleviates the symptoms of disequilibrium, and any factor that inhibits mobility also impedes economic adjustments. Does the high level of education in modern industrial societies help or hurt economic transitions? Economic theory provides conflicting arguments. On the one side, the theory of firm-specific capital predicts that education increases job duration and therefore inhibits job mobility (Jovanovic, 1979). On the other side, education should increase mobility in markets with imperfect information because better educated persons should be better able to collect and process information, reducing search and transactions costs. In a PSID subsample consisting of 736 individuals, we observed labor and geographic mobility from 1968 to 1982 and related it to the level of education at 1968. It appears that labor and geographic mobility are governed by quite different behavioral mechanism. Education strongly affects future labor and geographic mobility, but in opposite ways. A high level of education inhibits labor mobility, but increases geographic mobility.

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    File URL: http://www.nber.org/papers/w2329.pdf
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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 2329.

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    Date of creation: Jul 1987
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    Publication status: published as "The Double-edged Impact of Education on Mobility" in Economics of Education Review, vol. 9, no. 1, 1990.
    Handle: RePEc:nbr:nberwo:2329

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    1. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
    2. Greenwood, Michael J, 1975. "Research on Internal Migration in the United States: A Survey," Journal of Economic Literature, American Economic Association, vol. 13(2), pages 397-433, June.
    3. Linneman, Peter D. & Graves, Philip E., 1983. "Migration and job change: a multinomial logit approach," MPRA Paper 19922, University Library of Munich, Germany.
    4. Heckman, James J & Borjas, George J, 1980. "Does Unemployment Cause Future Unemployment? Definitions, Questions and Answers from a Continuous Time Model of Heterogeneity and State Dependence," Economica, London School of Economics and Political Science, vol. 47(187), pages 247-83, August.
    5. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October.
    6. Bartel, Ann P, 1979. "The Migration Decision: What Role Does Job Mobility Play?," American Economic Review, American Economic Association, vol. 69(5), pages 775-86, December.
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    Cited by:
    1. Jacob Mincer, 1991. "Education and Unemployment," NBER Working Papers 3838, National Bureau of Economic Research, Inc.
    2. Bergin, Adele, 2009. "Job Mobility in Ireland," Papers RB2009/2/5, Economic and Social Research Institute (ESRI).
    3. Adele Bergin, 2008. "Job Mobility in Ireland," Economics, Finance and Accounting Department Working Paper Series n1940708.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.

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