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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 Reagan

Abstract

This paper estimates the effect of U.S. internal migration on real wage growth between the movers' first and second jobs. Our analysis of migration differs from previous research in three important aspects. First, we exploit the confidential geocoding in the National Longitudinal Surveys of Youth 1979 (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 a measure of migration based on moving across either county lines or state lines, the significant effects of migration for college graduates and dropouts disappear.

Suggested Citation

  • John C. Ham & Xianghong Li & Patricia Reagan, 2005. "Propensity score matching, a distance-based measure of migration, and the wage growth of young men," Staff Reports 212, Federal Reserve Bank of New York.
  • Handle: RePEc:fip:fednsr:212
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    References listed on IDEAS

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    Cited by:

    1. Rizwana Siddiqui, 2013. "Impact Evaluation of Remittances for Pakistan: Propensity Score Matching Approach," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 52(1), pages 17-44.
    2. Jennifer Hunt, 2004. "Are migrants more skilled than non-migrants? Repeat, return, and same-employer migrants," Canadian Journal of Economics, Canadian Economics Association, vol. 37(4), pages 830-849, November.
    3. Randall Kuhn & Bethany Everett & Rachel Silvey, 2011. "The Effects of Children’s Migration on Elderly Kin’s Health: A Counterfactual Approach," Demography, Springer;Population Association of America (PAA), vol. 48(1), pages 183-209, February.
    4. Zaiceva, Anzelika, 2006. "Self-Selection and the Returns to Geographic Mobility: What Can Be Learned from the German Reunification "Experiment"," IZA Discussion Papers 2524, Institute for the Study of Labor (IZA).
    5. Cécile Détang-Dessendre & Carine Drapier & Hubert Jayet, 2004. "The Impact of Migration on Wages: Empirical Evidence from French Youth," Journal of Regional Science, Wiley Blackwell, vol. 44(4), pages 661-691.
    6. Sonia Laszlo & Eric Santor, 2004. "Internal Migration and Borrowing Constraints: Evidence from Peru," Development and Comp Systems 0411022, University Library of Munich, Germany.
    7. Peter McHenry, 2014. "The Geographic Distribution Of Human Capital: Measurement Of Contributing Mechanisms," Journal of Regional Science, Wiley Blackwell, vol. 54(2), pages 215-248, March.
    8. Abdul Wadud, 2013. "Impact of Microcredit on Agricultural Farm Performance and Food Security in Bangladesh," Working Papers 14, Institute of Microfinance (InM).
    9. Arthur Grimes & Judd Ormsby & Kate Preston, 2017. "Wages, Wellbeing and Location: Slaving Away in Sydney or Cruising on the Gold Coast," Working Papers 17_07, Motu Economic and Public Policy Research.
    10. Demiralp, Berna, 2009. "The Impact of Information on Migration Outcomes," MPRA Paper 16121, University Library of Munich, Germany.
    11. Mahasuweerachai, Phumsith & Whitacre, Brian E. & Shideler, Dave W., 2010. "Does Broadband Access Impact Migration in America? Examining Differences between Rural and Urban Areas," The Review of Regional Studies, Southern Regional Science Association, vol. 40(1), pages 5-26.
    12. Cory Koedel & Rachana Bhatt, 2011. "Large-Scale Evaluations of Curricular Effectiveness: The Case of Elementary Mathematics in Indiana," Working Papers 1122, Department of Economics, University of Missouri, revised 31 Jan 2012.
    13. Blackburn, McKinley L., 2006. "The impact of internal migration on married couples' earnings in Britain, with a comparison to the United States," ISER Working Paper Series 2006-24, Institute for Social and Economic Research.
    14. Chung-Hua Shen & Yuan Chang, 2009. "Ambition Versus Conscience, Does Corporate Social Responsibility Pay off? The Application of Matching Methods," Journal of Business Ethics, Springer, vol. 88(1), pages 133-153, April.
    15. Mahasuweerachai, Phumsith & Whitacre, Brian E. & Shideler, David W., 2009. "Does Broadband Access Impact Population Growth in Rural America?," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49303, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    Wages ; Labor mobility;

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics

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