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Graduate migration, self-selection and urban wage premiums across the regional hierarchy

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  • Eliasson, Kent

    (Umeå School of Business, Economics and Statistics, Swedish Agency for Growth Policy Analysis)

  • Westerlund, Olle

    (Department of Economics, Umeå University)

Abstract

We use Swedish longitudinal population register data on university graduates and estimate the effect of migration on earnings. Migration between regional labour markets is used to identify static and dynamic agglomeration effects on earnings. Heterogeneity in effects is examined by individuals’ position in the ability distribution and by origin-destination size categories of regional labour markets. The results indicate that the effect of upward migration (from smaller to larger labour markets) on earnings is positive throughout. Downward migration (from larger to smaller labour markets) is generally associated with negative or no convincing signs of positive effects on earnings. The estimates indicate positive short-term urban wage premiums (UWP) for all origin-destination flows of upward migration, especially high UWP for in-migration to the Stockholm labour market region. The UWP of upward migration is positive also for movers in the lower end of the ability distribution, but it is substantially higher for high ability migrants. We also find evidence of a positive dynamic UWP of migration to Stockholm from the other regions, particularly for high ability migrants.

Suggested Citation

  • Eliasson, Kent & Westerlund, Olle, 2019. "Graduate migration, self-selection and urban wage premiums across the regional hierarchy," Umeå Economic Studies 962, Umeå University, Department of Economics.
    • Handle: RePEc:hhs:umnees:0962
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    1. Clara H. Mulder & Emma Lundholm & Gunnar Malmberg, 2020. "Young Adults’ Migration to Cities in Sweden: Do Siblings Pave the Way?," Demography, Springer;Population Association of America (PAA), vol. 57(6), pages 2221-2244, December.

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    More about this item

    Keywords

    Urban wage premium; human capital; migration; agglomeration economies; ability;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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