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Selective Migration, Occupational Choice, and the Wage Returns to College Majors

Tyler Ransom ()

No 13370, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: I examine the extent to which the returns to college majors are influenced by selective migration and occupational choice across locations in the US. To quantify the role of selection, I develop and estimate an extended Roy model of migration, occupational choice, and earnings where, upon completing their education, individuals choose a location in which to live and an occupation in which to work. In order to estimate this high-dimensional choice model, I make use of machine learning methods that allow for model selection and estimation simultaneously in a non-parametric setting. I find that OLS estimates of the returns to business and STEM majors relative to education majors are biased upward by 15% on average. Using estimates of the model, I characterize the migration behavior of different college majors and find that migration flows are twice as sensitive to occupational concentration as they are towage returns.

Keywords: college major; migration; occupation; Roy model (search for similar items in EconPapers)
JEL-codes: I2 J3 R1 (search for similar items in EconPapers)
Pages: 90 pages
Date: 2020-06
New Economics Papers: this item is included in nep-big, nep-lma, nep-mig and nep-ure
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