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John Kennan, James R. Walker
NBER Working Paper No. 9585
Issued in March 2003
NBER Program(s): EFG
LS
---- Abstract -----
The 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 NLSY 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.
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This paper was revised on February 12, 2008 Machine-readable bibliographic record -
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