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The effect of expected income on individual migration decisions

Author

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  • Kennan,J.
  • Walker,J.R.

    (University of Wisconsin-Madison, Social Systems Research Institute)

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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Suggested Citation

  • Kennan,J. & Walker,J.R., 2003. "The effect of expected income on individual migration decisions," Working papers 7, Wisconsin Madison - Social Systems.
    • Handle: RePEc:att:wimass:20037
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    File URL: http://www.ssc.wisc.edu/~jkennan/research/jkjwPaper_March03.pdf
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • J1 - Labor and Demographic Economics - - Demographic Economics

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