Internal Migration and Human Capital Theory - Ratio

Internal Migration and Human Capital Theory - Ratio

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Article (with peer review)

Home Sweet Home: Returns to Returning in the Age of Mass Migration

Ejermo, O., Enflo, K., Eriksson, B., & Prawitz, E.

Publication year

2025

Published in

American Economic Journal: Applied Economics, 17(4)

Abstract

Despite significant circular migration flows historically and today, their economic impacts remain understudied. Using data on predominantly rural Swedish migrants who returned from the United States during the Age of Mass Migration, we estimate returns to temporary migration in terms of wealth, income, demographic, and social outcomes. We find substantial wealth effects but limited evidence of increased labor income or occupational upgrading. Male returnees held nearly double the wealth of stayers, likely due to overseas savings, while female returnees gained wealth mainly through marriage. These findings highlight the need to consider wealth when evaluating the economic returns of temporary migration.

Link to the article.

City size, employer concentration, and wage income inequality

Halvarsson, D., & Korpi, M.

Publication year

2025

Published in

Institute for Evaluation of Labour Market and Education Policy (IFAU)

Abstract

This study investigates the relationship between the urban wage premium and employer concentration using Swedish full population employer-employee data. Departing from an AKM modeling framework to distinguish worker from firm specific heterogeneity – a measure of rent-sharing – we then measure the urban wage premium using differences in the estimated firm fixed effects at the level of local industries, nested within local labor markets. Our results suggest that labor market employer concentration, as calculated using the Hirschman-Herfindahl index and a leave-one-out instrumental variable design, can account for a significant share of the estimated urban wage premium (UWP). Addressing city-level wage income inequality by applying our model to different segments of the local labor market income distribution, we find that while the UWP pertains to all income segments, it is largest for top-income levels (above the 90th percentile), and within this segment employer concentration also has the largest explanatory power. Thus, while being an important explanatory factor for all percentiles of the local income distribution, a relatively lower employer concentration within larger cities, and vice versa, higher concentration within smaller cities, primarily help explain the variance of top wages within these cities/labor markets.

Ratio Working Paper No 363: City Size, Employer Concentration, and Wage Income Inequality

Korpi, M., & Halvarsson, D.

Publication year

2023

Published in

Rati Working Paper Series.

Abstract

In this paper, we build upon a monopsony framework, suggested by Card et. al. 2016, which links firm level productivity and rent-sharing to wage inequality. Specifically, our research questions address i) to which extent labor market concentration across firms (within different types of locally situated industries) affects variation in wages among workers within these firms and industries, and ii) how this variation in turn spills over into economy-wide inequality (measured at the level of local labor markets). Using linked employer-employee full population data for Sweden, and an AKM modelling framework to separate between worker- and firm-level heterogeneity, our results suggest that higher firm-level fixed effects (a measure of rent-sharing) is associated with lower labor market employer concentration, something which affects average wage income among firms accordingly. Addressing wage income inequality by applying our model to different segments of the local labor market income distribution, we find that reduced average employer concentration in larger cities accounts for almost all variation in the (positive) link between city size-and wage inequality, except for the largest metropolises where it captures around 30-50 percent of variation depending on the income segment that we focus on.