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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

    Our analysis of migration differs from previous research in three important aspects. First, we exploit the confidential geocoding in the 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 either a measure of migration based on moving across county lines or state lines, the significant effects of migration for college graduates and dropouts disappear.

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    File URL: http://www.usc.edu/dept/LAS/economics/IEPR/Working%20Papers/IEPR_05.13_%5BHam,Li,Reagan%5D.pdf
    File Function: First version, 2005
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    Bibliographic Info

    Paper provided by Institute of Economic Policy Research (IEPR) in its series IEPR Working Papers with number 05.13.

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    Length: 49 pages
    Date of creation: Dec 2004
    Date of revision:
    Handle: RePEc:scp:wpaper:05-13

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    Keywords: Propensity score matching; distance-based migration; wage growth;

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