Net Migration and State Labor Market Dynamics

摘要

The author presents a simple model of migration in which the net migration rate211u001einto a state depends on the expected present value of labor market conditions and 211u001eamenities. He shows that though this is a common model, existing empirical 211u001eestimates do not separately identify the underlying parameters. The identication 211u001eproblem can be thought of as an omitted variable bias because no explicit measure 211u001eof expected future labor market conditions is included. He uses state-level data 211u001eto estimate empirical models in which the underlying parameters are identied. He 211u001efinds that high wages and low unemployment encourage in-migration, but that the 211u001eomitted variable bias can be large. For example, when he controls for future 211u001econditions in one model, the strength of the relationship between current wages 211u001eand net migration is less than half as large. He integrates the migration model 211u001einto a simple labor supply and demand framework and use my estimates of the 211u001emigration model to simulate a labor market's response to permanent and transitory 211u001edemand shocks. In the short run, net migration responds more to permanent shocks 211u001eand current wages and employment rates respond more to transitory ones.