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A generalized options approach to aggregate migration with an application to US federal states

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Author Info
Christian Bayer () (Department of Economics University of Dortmund)
Falko Juessen

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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 to deal with dynamic self-selection problems that arises from the endogeneity of location choice and the persistency of migration incentives. Keeping track of the distribution dynamics of migration incentives has important consequences, because these dynamics influences the estimation of structural parameters, such as migration costs. For US interstate migration, we obtain a cost estimate of approximately two average annual household incomes. This is at most half of the migration cost estimates reported in previous studies. We attribute this difference to the treatment of the self selection problem

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File URL: http://repec.org/sed2006/up.28526.1140027869.pdf
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Paper provided by Society for Economic Dynamics in its series 2006 Meeting Papers with number 656.

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Date of creation: 03 Dec 2006
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Handle: RePEc:red:sed006:656

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Related research
Keywords: Self selection; migration; indirect inference; dynamic optimization;

Find related papers by JEL classification:
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis
C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers

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  1. Roc Armenter & Francesc Ortega, 2007. "Credible Redistributive Policies and Migration across US States," Economics Working Papers 1022, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
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This page was last updated on 2009-11-26.


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