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Maria Balgova, “Why don’t less educated workers move? The role of job search in migration decisions”

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Maria Balgova: “Why don’t less educated workers move? The role of job search in migration decisions” I establish a new stylised fact showing that less educated workers are not only less mobile, they are also significantly less likely to move with a job in hand. Using evidence based on US panel data, I argue that a large portion of the observed differences in migration behaviour is driven by the differences in workers’ employment options in other regions. Compared to college graduates, less educated workers find job search in more distant regions much more difficult. This limits their options to move for guaranteed employment, forcing them to move speculatively, and thereby reducing their overall mobility. I develop these results in two stages. First, I adapt the recent literature from empirical IO on discrete choice models with heteregeneous option sets to isolate the impact of differences in employment opportunities on migration decisions. Second, I extend the standard model of job search (McCall, 1970) to multiple residential locations. I estimate this model to quantify the size of cross-regional job search frictions, finding that they can explain approximately half of the migration propensity gap between the more and the less educated. This result opens a new policy channel in addressing regional differences and those left behind: the importance of the ability to find a job before moving suggests a large social return to improving regional search and matching for less educated groups.

Event details
What
  • Presentation
When Jan 21, 2019
from 15:00 to 16:30
Where Juridicum, Faculty Lounge
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