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Does Low Wealth Constrain Long-Distance Migration? Evidence from the NLSY79 Cohort

Author

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  • Peter McHenry

    () (Department of Economics, College of William and Mary)

Abstract

Although long-distance migration can be very beneficial, some families may have too little wealth (or liquidity) to finance a move, which may involve direct transportation costs and foregone earnings. I use individual-level longitudinal data (NLSY79) to assess whether wealth holdings directly influence migration decisions in the U.S. I focus on long-distance migration between labor markets, which imposes high migration costs but offers potentially better labor market outcomes. Contrary to a liquidity constraint story, I find consistently that plenty of people with low and even negative wealth move, and that they are even more likely to move than people with higher wealth holdings. The lack of a positive relationship between wealth and cross-labor market migration remains in alternative subsets of respondents, controlling for many household characteristics, in very flexible nonlinear models, and when using inheritance income as an instrument for wealth.

Suggested Citation

  • Peter McHenry, 2012. "Does Low Wealth Constrain Long-Distance Migration? Evidence from the NLSY79 Cohort," Working Papers 119, Department of Economics, College of William and Mary.
  • Handle: RePEc:cwm:wpaper:119
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    File URL: http://economics.wm.edu/wp/cwm_wp119.pdf
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    References listed on IDEAS

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    1. Abigail Wozniak, 2010. "Are College Graduates More Responsive to Distant Labor Market Opportunities?," Journal of Human Resources, University of Wisconsin Press, vol. 45(4), pages 944-970.
    2. Timothy J. Bartik, 2004. "Economic Development," Book chapters authored by Upjohn Institute researchers,in: J. Richard Aronson & Eli Schwartz (ed.), Managememnt Policies in Local Government Finance, pages 355-390 W.E. Upjohn Institute for Employment Research.
    3. Matthew J. Notowidigdo, 2011. "The Incidence of Local Labor Demand Shocks," NBER Working Papers 17167, National Bureau of Economic Research, Inc.
    4. Clark, William A.V. & van Ham, Maarten & Coulter, Rory, 2011. "Socio-Spatial Mobility in British Society," IZA Discussion Papers 5861, Institute for the Study of Labor (IZA).
    5. Bound, John & Holzer, Harry J, 2000. "Demand Shifts, Population Adjustments, and Labor Market Outcomes during the 1980s," Journal of Labor Economics, University of Chicago Press, vol. 18(1), pages 20-54, January.
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    Cited by:

    1. Ahmet Ali Taskin, 2014. "Sorted and Settled: Migration Decisions of Dual Income Families," ERSA conference papers ersa14p1219, European Regional Science Association.

    More about this item

    Keywords

    Migration; Wealth;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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