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Self-Selection and the Returns to Geographic Mobility: What Can Be Learned from the German Reunification "Experiment"

  • Anzelika Zaiceva
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    This paper investigates the causal effect of geographic labour mobility on income. The returns to German East-West migration and commuting are estimated exploiting the structure of centrally planned economies and a "natural experiment" of German reunification for identification. I find that migration premium is insignificantly different from zero, the returns for commuters equal to four percent of the mean of the total income, and the local average treatment effects for compliers are insignificant. In addition, estimation results suggest no positive self-selection for migrants, and some evidence of positive self-selection for commuters. Based on these results, moving West does not appear to be a highly rewarded option in Germany.

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    File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.44277.de/dp580.pdf
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    Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 580.

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    Length: 39 p.
    Date of creation: 2006
    Date of revision:
    Handle: RePEc:diw:diwwpp:dp580
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