geographic mobility

Author
Abstract

This paper develops and applies a new semi-parametric correction for sample-selection in the
context of a multi-market Roy model of mobility and earnings. Instead of workers choosing occupations
as in Roy's paper, this paper formulates a model where individuals choose which of the 50 states in the
U.S. (plus the District of Columbia) to live and work in. The new econometric methodology combines
Lee's (1982) parametric "maximum order statistic" approach to multi-choice selection models with Ahn
and Powell’s (1993) more recent work on "single-index" models. The resulting correction requires no
assumptions on the joint distribution of the error terms in the outcome and multiple selection equations
and can easily be adapted to a variety of other polychotomous choice problems. The empirical work,
which uses Census data for I980 and 1990, confirms the role of comparative advantage in mobility
decisions. The results suggest that self-selection of higher educated people to states with higher returns
to education generally leads to downward biases in the returns to education in state-specific labor
markets. I also find that state-to-state migration flows respond strongly to differences in the return to
education and amenities across states.

Year of Publication
1997
Number
381
Date Published
05/1997
Publication Language
eng
Citation Key
Econometrica , Vol. 70, No. 6, November, 2002
Dahl, G. (1997). Mobility and the Returns to Education: Testing A Roy Model With Multiple Markets. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01tt44pm85v (Original work published 05/1997AD)
Working Papers
Author
Abstract

I estimate the relative magnitudes of worker switching costs and whether the employer switching of experienced
engineers responds to outside wage offers. Institutional features imply that voluntary turnover
dominates switching in the market for Swedish engineers from 1970–1990. I use data on the allocation of engineers
across a large fraction of Swedish private sector firms to estimate the relative importance of employer
wage policies and switching costs in a dynamic programming, discrete choice model of voluntary employer
choice. The differentiated firms are modeled in employer characteristic space and each firm has its own agewage
profile. I find that a majority of engineers have moderately high switching costs and that a minority of
experienced workers are responsive to outside wage offers. Younger workers are more sensitive to outside
wage offers than older workers.

Year of Publication
2008
Number
543
Date Published
12/2008
Publication Language
eng
Citation Key
8313
Fox, J. (2008). Estimating the Employer Switching Costs and Wage Responses of Forward-Looking Engineers. Retrieved from http://arks.princeton.edu/ark:/88435/dsp010k225b06h (Original work published 12/2008AD)
Working Papers