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A simultaneous probit model of earnings, migration, job change with wage heterogeneity

Author

Listed:
  • Alok K. Bohara

    (Department of Economics, University of New Mexico Albuquerque, NM 87131, USA)

  • Randall G. Krieg

    (Department of Economics, University of Northern Iowa, Cedar Falls, IA 50614-0401, USA)

Abstract

In this study, earnings are decomposed in order to measure the effects due to individual characteristics and to unobserved heterogeneity. These effects are shown to work in opposite directions, complicating the effect of earnings on migration. The use of aggregate earnings masks the two separate effects. Those earning more because of productive characteristics are less likely to move. However, higher earnings due to other reasons that are more qualitative act as an impetus for migration. Job change is often part of the decision to migrate. In our analysis we recognize the endogeneity of job change in the migration equation and estimate it separately in the model. Job change is found to have a significantly positive influence on migration. Moreover, the separate estimation of job change brings out the important role of both explained and unexplained earnings on the decision to switch jobs, both factors decreasing the perceived necessity of changing jobs.

Suggested Citation

  • Alok K. Bohara & Randall G. Krieg, 1999. "A simultaneous probit model of earnings, migration, job change with wage heterogeneity," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 33(4), pages 453-467.
    • Handle: RePEc:spr:anresc:v:33:y:1999:i:4:p:453-467
    Note: Received: February 1997/Accepted: June 1998
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    Cited by:

    1. Vijay K. Mathur & Sheldon H. Stein, 2005. "Do amenities matter in attracting knowledge workers for regional economic development?," Papers in Regional Science, Wiley Blackwell, vol. 84(2), pages 251-269, June.
    2. Jeffrey J. Yankow, 2003. "Migration, Job Change, and Wage Growth: A New Perspective on the Pecuniary Return to Geographic Mobility," Journal of Regional Science, Wiley Blackwell, vol. 43(3), pages 483-516, August.
    3. Andrés Rodríguez‐Pose & Vassilis Tselios, 2010. "Returns to migration, education and externalities in the European Union," Papers in Regional Science, Wiley Blackwell, vol. 89(2), pages 411-434, June.
    4. repec:rre:publsh:v:33:y:2003:i:2:p:142-63 is not listed on IDEAS
    5. Kim, Chansung, 2008. "Commuting time stability: A test of a co-location hypothesis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(3), pages 524-544, March.

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