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Wages, Wellbeing and Location: Slaving Away in Sydney or Cruising on the Gold Coast

Author

Listed:
  • Arthur Grimes

    () (Motu Economic and Public Policy Research)

  • Judd Ormsby

    () (Motu Economic and Public Policy Research)

  • Kate Preston

    () (Motu Economic and Public Policy Research)

Abstract

We analyse the relationships between subjective wellbeing (SWB), wages and internal migration. Our study addresses whether people make (revealed preference) location decisions based on SWB and/or wage prospects. We present both a theoretical intertemporal location choice model and empirical analyses using the Australian longitudinal HILDA dataset. Our theory predicts considerable heterogeneity in location choices for individuals at different life stages depending on their individual characteristics, including their rate of time preference. We find a significant and sustained uplift in SWB for migrants, which holds across a range of sub-samples. By contrast, wage responses are muted albeit with heterogeneity across groups. Our theory and results show that migration decisions are considered within a life-cycle context. The estimated pronounced upturn in SWB for migrants substantiates the usefulness of SWB both as a concept for policy-makers to target and for researchers to incorporate in their studies.

Suggested Citation

  • 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.
  • Handle: RePEc:mtu:wpaper:17_07
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    File URL: http://motu-www.motu.org.nz/wpapers/17_07.pdf
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    References listed on IDEAS

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    Cited by:

    1. Arthur Grimes & Dennis Wesselbaum, 2018. "Moving towards happiness," Working Papers 18_07, Motu Economic and Public Policy Research.
    2. Kate Preston & Arthur Grimes, 2017. "Migration and Gender: Who Gains and in Which Ways?," Working Papers 17_08, Motu Economic and Public Policy Research.

    More about this item

    Keywords

    Regional migration; wages; subjective wellbeing; non-pecuniary amenities.;

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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