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Propensity Score Matching, a Distance-Based Measure of Migration, and the Wage Growth of Young Men

  • John C. Ham
  • Xianghong Li
  • Patricia B. Reagan

Our analysis of migration differs from previous research in three important aspects. First, we exploit the confidential geocoding in the 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 either a measure of migration based on moving across county lines or state lines, the significant effects of migration for college graduates and dropouts disappear.

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Paper provided by Institute of Economic Policy Research (IEPR) in its series IEPR Working Papers with number 05.13.

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Length: 49 pages
Date of creation: Dec 2004
Date of revision:
Handle: RePEc:scp:wpaper:05-13
Contact details of provider: Phone: (213) 740-3521
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Web page: http://www.usc.edu/dept/LAS/economics/IEPR/

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  1. Alberto Abadie & Guido W. Imbens, 2008. "On the Failure of the Bootstrap for Matching Estimators," Econometrica, Econometric Society, vol. 76(6), pages 1537-1557, November.
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  7. Donald W. K. Andrews & Moshe Buchinsky, 2000. "A Three-Step Method for Choosing the Number of Bootstrap Repetitions," Econometrica, Econometric Society, vol. 68(1), pages 23-52, January.
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  10. James J. Heckman & Hidehiko Ichimura & Petra Todd, 1998. "Matching As An Econometric Evaluation Estimator," Review of Economic Studies, Oxford University Press, vol. 65(2), pages 261-294.
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  16. Borjas, George J. & Bronars, Stephen G. & Trejo, Stephen J., 1992. "Self-selection and internal migration in the United States," Journal of Urban Economics, Elsevier, vol. 32(2), pages 159-185, September.
  17. Guido W. Imbens, 2004. "Nonparametric Estimation of Average Treatment Effects Under Exogeneity: A Review," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 4-29, February.
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  21. Paul E. Gabriel & Susanne Schmitz, 1995. "Favorable Self-Selection and the Internal Migration of Young White Males in the United States," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 460-471.
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  26. Raphael, Steven & Riker, David A., 1999. "Geographic Mobility, Race, and Wage Differentials," Journal of Urban Economics, Elsevier, vol. 45(1), pages 17-46, January.
  27. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20035, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
  28. Robert J. Willis & Sherwin Rosen, 1978. "Education and Self-Selection," NBER Working Papers 0249, National Bureau of Economic Research, Inc.
  29. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Oxford University Press, vol. 64(4), pages 605-654.
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  32. Bartel, Ann P, 1979. "The Migration Decision: What Role Does Job Mobility Play?," American Economic Review, American Economic Association, vol. 69(5), pages 775-86, December.
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