Internal migration and human capital theory

Abstract

Empirical studies of internal labor migration, modelling average outcomes, suggest migrants move to enhance returns to their labor. In contrast, major international surveys show less than a third of internal migrants as motivated by employment reasons. Using Swedish panel data for the years 2001-2009, this paper addresses this disconnect by examining the full distribution of migrant income changes. Results from initial CEM matching and quantile regression suggest that large returns to internal migration are mostly captured by the higher educated, those initially low in the income distribution and those heading into the largest metropolitan regions. Much if not most of migration outcomes are however a wash and indeed often negative in terms of pay-off. This suggests models of average outcomes as insufficient in addressing human capital motivated migration.
Related content: Working paper No. 244

Ratio Working Paper No. 358: Native Population Turnover & Emerging Segregation: The Role of Amenities, Crime and Housing

Working paperPublication

Korpi, M., Halvarsson, D., Öner, Ö., A.V. Clark, W., Mihaescu, O., Östh, J. & Bäckman, O.

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Publication year

2022

Published in

Ratio Working Paper.

Abstract

Using geo-coded full-population grid-level data for the three largest metropolitan areas in Sweden, 1993-2016, this paper i) estimates the level and pace of ethnic segregation, ii) examines possible tipping points in this development, and iii) gauges the importance of several mitigating or exacerbating factors (such as the mix of housing area tenure type, different types of amenities, and crime). We use OLS and 2SLS to estimate outcomes at two different geographic levels; 250 x 250 square meter grids and SAMS areas (roughly equivalent to US census tracts), respectively. On average, we find that for every 1 percentage point increase in immigration, native growth is reduced by around -0.3 percentage points. Crime levels exacerbate developments and factors such as housing area tenure-type mix and access to various amenities slows it down, but only marginally so. Using repeated and single random sampling for cross-validation, and the twin common methodological approaches as suggested in the literature, we estimate possible tipping points in these segregation developments. In contrast to most other studies in the literature, none of our potential tipping points are however statistically significant when probing their relevance in explaining factual population developments, suggesting a rather more continuous – albeit steeply so – segregation process rather than a structural brake. In terms of tipping point methodology, our main findings are that fixed-point estimation is less robust than R-square maximization for small geographical units, and that the former consistently selects for lower tipping-point candidates than the latter.

Absolute income mobility and the effect of parent generation inequality: An extended decomposition approach

Article (with peer review)Publication

Liss, E., Korpi, M., & Wennberg, K.

Publication year

2023

Published in

European Economic Review, 152, 104359.

Abstract

We use full-population data to study trends in intergenerational absolute income mobility, measured as the ratio of children earning more than their parents, for 11 Swedish cohorts born 1972-1983. Absolute mobility during this period increases from 72% to 84% for men and from 76% to 86% for women-higher figures than in most other countries studied. To explain these results, we outline a novel decomposition strategy that accounts for cohort variation in parent-generation income inequality. All else equal, if income inequality is higher in the parent generation, more economic growth is required to achieve any given level of absolute mobility. We discuss implications for comparative research in intergenerational income mobility.

Working Paper No. 332: Are New Shopping Centers Drivers of Development in Large Metropolitan Suburbs? The Interplay of Agglomeration and Competition Forces

Working paperPublication

Mihaescu, O., Korpi, M. & Öner, Ö.

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Publication year

2020

Published in

Ratio Working Paper

Abstract

We investigate to which extent shopping centers drive local economic development by studying how distance to newly established shopping centers affects the performance of incumbent firms, located in the suburbs of the three Swedish major metropolitan areas Stockholm, Gothenburg, and Malmö, 2000-2016. We use a regression setup with around 27,000 firm-year observations and explore the possible heterogeneity imposed on the results from two main elements of spatial economics theory: the size of the new retail area and the distance from the new retail area to the analyzed incumbents. We observe a clear difference in the direction of the effects of large versus small shopping centers. While competition forces are much stronger in the case of the establishment of large shopping centers, yielding a negative 5% on incumbent firm revenue and negative 3% on firm employment, results indicate the opposite pattern for smaller shopping centers; with firm revenue and firm employment increasing 4% and 3%, respectively. Moreover, we also observe that both agglomeration and competition effects attenuate sharply with distance from the new entrant, confirming one of the central premises of retail location theory. Finally, we observe that the geographical scope of the effects is much wider in the case of larger shopping centers, with estimates becoming statistically insignificant at about 9-10 km from the new entry, as compared to 3-4 km in the case of smaller retail centers.

Internal migration and human capital theory: To what extent is it selective?

Abstract

Similar content

Ratio Working Paper No. 358: Native Population Turnover & Emerging Segregation: The Role of Amenities, Crime and Housing

Absolute income mobility and the effect of parent generation inequality: An extended decomposition approach

Working Paper No. 332: Are New Shopping Centers Drivers of Development in Large Metropolitan Suburbs? The Interplay of Agglomeration and Competition Forces