Econometrica Vol. 79 No. 1 2011
The Effect of Expected Income on Individual Migration Decisions
Abstract
This paper develops a tractable econometric model of optimal migration, focusing on expected income as the main economic influence on migration. The model improves on previous work in two respects: it covers optimal sequences of location decisions (rather than a single once-for-all choice) and it allows for many alternative location choices. The model is estimated using panel data from the National Longitudinal Survey of Youth on white males with a high-school education. Our main conclusion is that interstate migration decisions are influenced to a substantial extent by income prospects. The results suggest that the link between income and migration decisions is driven both by geographic differences in mean wages and by a tendency to move in search of a better locational match when the income realization in the current location is unfavorable.
- DOI
- 10.3982/ecta4657
- Volume
- 79
- Issue
- 1
- Pages
- 211-251
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref