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Local Information, Income Segregation, and Geographic Mobility

Author

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  • Bond Timothy N.

    (Department of Economics, Krannert School of Management, Purdue University, 403 W. State St., Lafayette, IN, USA, 47907)

  • Salisbury Laura

    (Department of Economics, York University, Toronto, Canada)

Abstract

We develop a model of migration in the face of geographic information asymmetries. Firms from a given city observe whether or not a local worker is a member of a disadvantaged local community, a negative indicator of productivity, but do not have this information for migrants to this city. With this knowledge, workers must decide whether to migrate and obscure information about their community of origin. Our model generates results consistent with recent trends in intergenerational mobility and internal migration as well as new predictions about the relationship between migrant outcomes and income segregation. We confirm these predictions using data from the U.S. census.

Suggested Citation

  • Bond Timothy N. & Salisbury Laura, 2018. "Local Information, Income Segregation, and Geographic Mobility," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 18(3), pages 1-17, July.
    • Handle: RePEc:bpj:bejeap:v:18:y:2018:i:3:p:17:n:7
    DOI: 10.1515/bejeap-2017-0314
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    References listed on IDEAS

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    1. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1553-1623.
    2. Allison Shertzer & Randall P. Walsh, 2019. "Racial Sorting and the Emergence of Segregation in American Cities," The Review of Economics and Statistics, MIT Press, vol. 101(3), pages 415-427, July.
    3. Katz, Eliakim & Stark, Oded, 1984. "Migration and Asymmetric Information: Comment," American Economic Review, American Economic Association, vol. 74(3), pages 533-534, June.
    4. Katz, Eliakim & Stark, Oded, 1989. "International labour migration under alternative informational regimes: A diagrammatic analysis," European Economic Review, Elsevier, vol. 33(1), pages 127-142, January.
    5. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
    6. Katz, Eliakim & Stark, Oded, 1986. "Labor mobility under asymmetric information with moving and signalling costs," Economics Letters, Elsevier, vol. 21(1), pages 89-94.
    7. Unknown, 1986. "Letters," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 1(4), pages 1-9.
    8. Salisbury, Laura, 2014. "Selective migration, wages, and occupational mobility in nineteenth century America," Explorations in Economic History, Elsevier, vol. 53(C), pages 40-63.
    9. Raj Chetty & Nathaniel Hendren & Lawrence F. Katz, 2016. "The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment," American Economic Review, American Economic Association, vol. 106(4), pages 855-902, April.
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    Cited by:

    1. Batistich, Mary Kate & Bond, Timothy N. & Linde, Sebastian & Mumford, Kevin J., 2024. "Statistical Discrimination and Optimal Mismatch in College Major Selection," IZA Discussion Papers 17237, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    migration; asymmetric information; income segregation;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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