Internal Migration and Human Capital Theory

Abstract

Empirical studies of international 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. 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: Internal Migration and Human Capital Theory: To What Extent Is It Selective

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.

A Literature Review of the Nexus between Migration and Internationalization

Article (with peer review)Publication

Hatzigeorgiou, A. & Lodefalk, M.

Publication year

2021

Published in

Journal of International Trade & Economic Development

Abstract

Protectionism and anti-globalization tides have been rising already before the COVID-19 pandemic, with Brexit and the China-U.S. trade war, as two examples. A continued disruption to global trade, investment and value chains could worsen global development. Economic recovery will require restoring firms’ ability to trade, offshore and invest globally. To achieve this, it will be useful to understand the role of migration for foreign trade, investment and other aspects of internationalization. In this paper we review and discuss over 100 papers published about migrants’ roles on international trade, foreign direct investment and offshoring. Although the evidence suggests that migration facilitates trade and internationalization, we also note substantial gaps and inconsistencies in the existing literature. The aim of this paper is to encourage further research and assist policymakers in their efforts to promote economic recovery including internationalization.

Ratio Working Paper No. 244: Internal Migration and Human Capital Theory: To What Extent Is It Selective

Ratio Working Paper No. 244

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

A Literature Review of the Nexus between Migration and Internationalization