On the Dynamics of Interstate Migration: Migration Costs and Self-Selection

Christian Bayer and Falko Juessen

Review of Economic Dynamics, 2012, vol. 15, issue 3, 377-401

Abstract: This paper develops a dynamic structural model of migration decisions that is aggregated to describe the behavior of interregional migration. Our structural approach allows us to deal with dynamic self-selection problems that arise from the endogeneity of location choice and the persistence of migration incentives. The self-selection problem is solved by keeping track of the distribution of migration incentives over time. This econometric treatment has important consequences for the estimation of structural parameters such as migration costs. For US interstate migration, we obtain a cost estimate of roughly two-thirds of an average annual household income. We also show that the treatment of income persistence has important consequences for comparative statics of the model as well as microeconomic age patterns of migration. (Copyright: Elsevier)

Keywords: Dynamic self-selection; Dynamic discrete choise, Aggregate migration; Indirect inference (search for similar items in EconPapers)
JEL-codes: C24 C25 E24 J61 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (40)

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Working Paper: On the Dynamics of Interstate Migration: Migration Costs and Self-Selection (2006)
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DOI: 10.1016/j.red.2012.02.002

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