Home Bias in Early Labor Location Choices: Does University Location Matter?

Geographic mobility facilitates labor-market adjustment, yet home bias can impede relocation and perpetuate regional disparities, including in the provision of essential services. Using administrative records covering the universe of Spanish medical graduates who selected their first job between 1986 and 2019, we examine whether university location shapes early-career mobility. We first document substantial home attachment: more than half of graduates begin their careers in their home province. We then show that university location has a large effect on subsequent location choices. Completing a medical degree in one’s home province increases the probability of starting work there by 22 percentage points. The effect of opening a medical school on aggregate home bias depends on the local labor market’s capacity to absorb additional graduates. Finally, a nationwide liberalization of university admissions reduced students’ propensity to study in their home university district and, through this channel, significantly weakened home bias. These findings show that the location of higher-education institutions and the design of admissions policies can shape the geographic allocation of skilled workers at labor-market entry.