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In Search of Magic Dirt: An Exploration of Labor Mobility across Developed Nations

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  • Avi Woodward-Kelen

Abstract

This paper seeks to explore the multifaceted incentives faced by potential migrants across developed countries, focusing on the empirical examination the drivers of, and barriers to, migration. Leveraging census microdata from OECD countries, this paper adapts methodologies from Clemens et al. (2019) to quantify wage disparities and employs a quasi-gravity trade model to analyze migration elasticity in relation to wage gaps, natural barriers (geographical and cultural differences), and policy constraints. A straightforward application of the Roy-Borjas model finds no evidence of selection bias on unobservable characteristics, although some migrant groups systematically outperform host-country natives. I find that migration patterns are highly similar to patterns of international trade in their sensitivity to distance, and my variance decomposition analysis finds that natural barriers are approximately as good as wage gaps are in predicting the variance in migration decisions.

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  • Avi Woodward-Kelen, 2024. "In Search of Magic Dirt: An Exploration of Labor Mobility across Developed Nations," LIS Working papers 884, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:884
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    References listed on IDEAS

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    1. Owen A. Lamont & Richard H. Thaler, 2003. "Anomalies: The Law of One Price in Financial Markets," Journal of Economic Perspectives, American Economic Association, vol. 17(4), pages 191-202, Fall.
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    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • K37 - Law and Economics - - Other Substantive Areas of Law - - - Immigration Law
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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