Regional Fertility Differentials and the Effect of Migration: An Analysis of U.S. State-level Data

This paper explores, theoretically and empirically, the influence of interregional migration on regional fertility differentials. Specifically, it tests the hypothesis that regions that are closely linked through migration have, all else held constant, a lower differential in fertility than regions that are relatively isolated from one another. A model linking the fertility differential between two states to migration as well as a number of socioeconomic variables is articulated. The model is tested by means of a randomization procedure using U.S. state-level data for 1980. Results support the hypothesis that an increasing volume of interregional migration tends to lower regional fertility differentials.     

LOCATION‐SPECIFIC HUMAN CAPITAL,LOCATION CHOICE AND AMENITY DEMAND*

ABSTRACT The role of amenities in the flow of migrants has long been a subject of debate. This paper advances an original model of amenities that work through household production instead of directly through utility. Area characteristics (amenities) affect household production, causing certain kinds of human capital investments to be rewarded more than others. Area heterogeneity thus makes such investments location‐specific. This specificity—along with a period of exogenous location—increases the opportunity costs of moving, diminishes migration flows between dissimilar locations and increases valuation of amenities that were present in the originating area. These theoretical results emphasize people's sorting across areas and thus differ from the results of the standard model of compensating differentials. Empirical tests of the model's predictions using NLSY79 data show that childhood investments affect migration flows in the way proposed by the model.     

Regional labor markets and the household migration decision

"The current work extends the modeling of the household migration decision to take into account location-specific influences and relates these to regional wage differentials. This allows for more complete analysis of real wage gains or losses associated with migration and inferences regarding the nature of equilibrium or disequilibrium wage differentials between regions." Data are from the Michigan Panel Study of Income Dynamics for the period 1976-1978. "The results indicate systematic and often substantial influences of household location on the nominal wage and on both job and residence mobility. Based on these findings, comparisons of wage growth patterns are made for those changing jobs and region of residence status. Although compared to other households the wage growth of these migrants is on average lower before migration and higher after migration, the analysis provides no support for arguments that nominal regional wage differentials reflect systematic ordering of real wage differentials. This finding suggests that real wage gains are closely tied to the interregional migration decision but are not related to regional nominal wage differentials in a simple fashion."     

MIGRATION AS A WAY TO DIVERSIFY: EVIDENCE FROM RURAL TO URBAN MIGRATION IN THE U.S.

This paper extends the utility maximization model of migration by introducing income and unemployment‐related uncertainties as determinants of utility, and analyzes the effects of the informational advantages of migrants. The paper maintains that migration would expand an individual's economic choices and opportunities and allow diversification. Consequently, diversification advantages influence the location decisions of migrants, an effect captured by the correlation of incomes at the origin and potential destinations. We use the discrete choice model based on random utility maximization as the framework for our empirical investigation of migration from the United States rural to urban counties. This paper takes advantage of an equivalent relation between the conditional logit model and Poisson regression to study the migration decisions using aggregate data among a large set of spatial alternatives. The results show that the diversification concerns have significant effects on location decisions of the rural‐urban migrants in the United States.     

EXPLORING THE DETAILED LOCATION PATTERNS OF U.K. MANUFACTURING INDUSTRIES USING MICROGEOGRAPHIC DATA*

ABSTRACT We use a point‐pattern methodology to explore the detailed location patterns of U.K. manufacturing industries. In particular, we consider the location of entrants and exiters versus continuing establishments, domestic‐ versus foreign‐owned, large versus small, and affiliated versus independent. We also examine colocalization between vertically‐linked industries. Our analysis provides a set of new stylized facts and confirmation for others.     

A Flexible Mathematical Programming Model to Estimate Interregional Input–Output Accounts*

Abstract. This study implements and tests a mathematical programming model to estimate interregional, interindustry transaction flows in a national system of economic regions based on an interregional accounting framework and initial information of interregional shipments. A national input–output (IO) table, regional data on gross output, value‐added, exports, imports, and final demand at sector level are used as inputs to generate an interregional IO account that reconciles regional economic statistics and interregional transaction data. The model is tested using data from a multiregional global IO database and shows remarkable capacity to discover true interregional trade patterns from highly distorted initial estimates.     

An equilibrium model of gross migration

ABSTRACT The paper presents and tests a new model of migration which differs significantly from the conventional disequilibrium approach. We show that variations in rates of gross migration across regions are equilibrium responses to variations in levels of amenities, governmental policies, etc. The model is tested using data on the gross migration of whites, 1975-80, together with amenities such as climate and with economic variables such as government services, taxes and unionization. Empirical results suggest that the equilibrium model is more consistent with actual migration patterns than is the conventional disequilibrium approach. We estimate compensating differentials and migration elasticities for these variables.     

THE DETERMINANTS OF THE RECENT INTERREGIONAL MIGRATION FLOWS IN ITALY: A PANEL DATA ANALYSIS*

ABSTRACT This study investigates the determinants of interregional migration flows in Italy in the light of the upsurge occurred in 1996, after two decades of decreasing internal migration rates. The fixed‐effect vector decomposition estimator (FEVD) is applied to a gravity model using bilateral migration flows for the period 1996–2005. It is shown that the FEVD improves the estimates with respect to the traditional panel data estimators. The GDP per capita and the unemployment rate appear to be the key determinants whose changes push migrants out from their regions and direct them to “better off” destinations. Migrants leaving the regions in the Center‐North respond differently to the push and pull forces compared to southern migrants. The dynamic model provides evidence for the presence of social networks, which in this analysis take place for each pair of regions.     

STEADY-STATE LABOR TURNOVER AS OPTIMAL HOUSEHOLD BEHAVIOR*

ABSTRACT. Models of the firm with costly labor turnover and models of migration with location-specific consumption amenities are two standard explanations of the co-existence of persistent wage differentials with extensive labor mobility. Labor turnover models postulate a worker quit function where the quit rate is inversely related to the regional wage differential in the steady state. We use amenity-consumption models of migration to show conditions under which this postulate is consistent with household utility maximization. Our model extends standard amenity-consumption analysis by making the value of amenities contingent on the “state” of the household. These household states are defined in terms of demographic, education, and health characteristics and are assumed to follow a Markov process.     

Commuting and migration

This paper studies the connection between interregional commuting and interregional migration, using data from the Czech Republic. In principle, prior commuting could either raise or lower the propensity to migrate, depending on whether the existence of commuting alters the benefits of migration by more than it changes the costs. The Czech data, however, indicate that commuting raises the likelihood of migration overall and for nonelderly age groups. But for the elderly, the effect is the reverse, with prior commuting making migration less likely.     

Analysis of Interregional Labor Migration in Spain Using Gross Flows

In this paper we study the economic determinants of Spanish interregional labor force flows from an aggregate perspective. The study is based on a matching model of the labor market applied to migration, and uses gross rather than net flows as other studies do. Among the main results, we find that unemployment increases out-migration because unemployed people search more actively, but when the unemployment rate is above a certain level this effect is reduced. We also find that the rate of change of relative wages is a significant determinant of migration in Spain.     

Rural Youth Migration Trends in Australia: an Overview of Recent Trends and Two Inland Case Studies

Much of what has been written on the topic of Australian rural youth migration trends and processes has often proceeded from data‐free, or data‐poor grounds. In this context, this paper analyses recent trends in youth (15 to 24 years of age) migration for a temporally‐consistent set of Statistical Divisions (SDs) in inland rural Australia, and for local government areas within the Northern Tablelands and Slopes and Ranges of northern New South Wales and the Western Australian Central Wheatbelt. The paper finds that rates of youth loss from rural regions have increased over the past twenty years. Yet the patterns, processes, causes and impacts of rural youth migration are distributed in a spatially‐uneven fashion. Some remote areas are receiving net migration gains while booming ‘sea change’ coastal regions have experienced heavy losses. While the ‘flight to the bright city lights’ syndrome is evident, relatively high proportions of young people in the Northern SD of NSW move within their immediate region. Nevertheless, some common understandings concerning youth mobility were also confirmed. Gender differentials in migration propensity between women and men are evident even at quite local scales. Young people are also more likely to search out capital cities than the rest of the population. Most inland areas still continue to experience heavy losses of local youth. A more precise understanding of rural youth migration trends is an important stepping stone in the establishment of a reinvigorated research effort into young rural people's perspectives of their changing life chances in their home communities.     

The effects of internal migration on regional wage and unemployment disparities in Canada

"This paper examines the role of the migration mechanism in the context of a general interregional factor flow adjustment model. Using an estimation technique, which pools cross-section and time series data, the direct effects of migration flows and regional investment on the growth of regional wages and unemployment [in Canada] are examined. The results suggest that migration has a small, but significant impact on regional wages and unemployment rates."     

AMENITIES VERSUS LABOR MARKET OPPORTUNITIES: CHOOSING THE OPTIMAL DISTANCE TO MOVE*

ABSTRACT. A recent debate in the regional economics literature has focused attention on the motivation behind an individual's decision to migrate. Human-capital migration models emphasize labor market disequilibria whereas alternative (hedonic) migration models stress households’altered demand for nontraded goods. In this paper, we test the relative importance of these two possible motivations for moving between metropolitan areas. We use an intercity hedonic model to decompose wages into equilibrium and disequilibrium components. We then compare the separate influences of amenities and the disequilibrium component of wages on the distance moved between two metropolitan areas. Our findings indicate that both economic factors and amenity differentials are significant factors in explaining regional migration.     

A LONG RUN ECONOMIC EFFECT ANALYSIS OF ALTERNATIVE TRANSPORTATION FACILITY PLANS—REGIONAL AND NATIONAL

Initially we explained the main part of our model which enabled us to estimate and compare the long run and global economic effects of alternative transportation facility plans. Usually the short run effects of this kind of regional economic impact have been analyzed by input-output models, and the long run effects by econometric models. However, in this model, the input-output model and the econometric model were combined so as to enable us to analyze the global and long run economic effects. The interregional trade pattern coefficients and input coefficients change endogenously in each year in this model. It has previously been assumed that the fixedness of interregional trade pattern coefficients and input coefficients are the weakest points in applying the interregional input-output model for long run studies. In our model, on the contrary, variation of these coefficients has central importance. We then showed the results which were obtained from applying this model to a comparison of the long run economic effects of alternative bridge construction plans over the Japan Inland Sea. The results obtained from this demonstrative calculation are reasonable. Thus, we think, this model has sufficient applicability to the comparison of economic effects of alternative plans for nationwide transportation facility improvement. However, the variations of production cost differentials between regions are given exogenously in this model. To make them endogenous, agglomeration economies should be considered more precisely. In that case, the applicability and the precision of this model could be improved.     

REGIONAL WAGE DIFFERENCES IN THE NETHERLANDS: MICRO EVIDENCE ON AGGLOMERATION EXTERNALITIES

Based on micro data on individual workers for the period 2000–2005, we show that wage differentials in the Netherlands are small but present. A large part of these differentials can be attributed to individual characteristics. Remaining effects are partially explained by variations in employment density, with an elasticity of about 4.8 percent, and by Marshall‐Arrow‐Romer externalities, where doubling the local share of a (two‐digit) industry results in a 2.9 percent higher productivity. We also find evidence for small negative effects of competition (Porter externalities) and diversity (Jacobs externalities).     

RECESSIONARY SHOCKS AND REGIONAL EMPLOYMENT: EVIDENCE ON THE RESILIENCE OF U.K. REGIONS*

ABSTRACT We analyze the resilience of U.K. regions to employment shocks. Two basic notions of resilience are distinguished. With engineering resilience, there is an underlying stable growth path to which a regional economy rebounds following a shock. With ecological resilience, shocks can permanently affect the growth path of the regional economy. Our data set consists of quarterly employment series for 12 U.K. regions (NUTS I) for the period 1971–2010. Using a seemingly unrelated regression (SUR) model specification, we test for the relevance of (engineering) resilience of U.K. regional employment to the four recessionary shocks in our sample. It turns out that U.K. regions do indeed differ in their resilience, but that these differences mainly concern the initial resistance to these shocks and not so much the recovery stage. The SUR model does not allow shocks to have permanent effects and it also does not take the possibility of time differentiated shock spillovers between the 12 regions into account. To this end, we also estimate a vector error‐correction model (VECM) specification where employment shocks can have permanent effects and where also interregional employment linkages are included. We find that employment shocks typically have permanent effects when it concerns the own‐region effects. Permanent effects can also be found for the impact on other regions but the interregional effects are typically only significant for nearby regions.     

The role of equilibrium and disequilibrium in modeling regional growth and decline: a critical reassessment

ABSTRACT. The assumption of interregional equilibrium in migration research has recently been attacked. At issue is the motivation for on-going migration if rents and wags accurately compensate for spatial amenity variations; but if rents and wages fail to accurately compensate potential migrants, then amenity valuations must be flawed. We here show that arguments supporting substantial disequilibrium in the US. economy are unconvincing. The substantive issues are then clarified by a model which allows for both equilibrium and disequilibrium migration. We conclude that intertemporally systematic migration stems predominantly from equilibrium forces.     

Proximity and economic activity: An analysis of vendor‐university transactions

This paper uses transaction‐based data to provide new insights into the link between the geographic proximity of businesses and associated economic activity. It develops two new measures of, and a set of stylized facts about, the distances between observed transactions between customers and vendors for a research intensive sector. Spending on research inputs is more likely with businesses physically closer to universities than those further away. Firms supplying a university project in one year are more likely to subsequently open an establishment near that university. Vendors who have supplied a project, are subsequently more likely to be a vendor on the same or related project.     

The determinants of labor migration in Egypt

The factors which affect individual decisions with regard to geographic movement in Egypt are examined and the magnitude in which each factor exerts its influence on aggregate geographic labor supply adjustments is estimated. The spatial unit used in the study is the administrative region, of which there are 25. No effort is made to esimate the impact which migration has had on the origin or destination region. The migrant will presumably choose that destination which, given his information, the migrant thinks will be best. The model which is employed attempts to explain gross interregional migration without the explicit introduction of an individual decision function. Rather, migration is related to certain aggregate proxy variables. Among the independent variables employed in the analysis are (origin and destination) income, education, urbanization, and population. The other explanatory variable used is the distance between region i and region j. The migration measure employed refers to cumulative male migration which occurred prior to 1960; the independent variables are defined for a given point in time (1960). The independent variables explain a reasonably large percentage of the variance in migration between regions in Egypt. All variables were significant at the 5% level or better. The findings indicate that distance acts as an important impediment to migration. Migration is away from low wage and toward high wage regions, which may have contributed to a narrowing of regional wage differentials. Migrants are attracted to regions which have large populations and to regions which have a large percentage of urban to total population. A tendency exists for migrants to come from regions with large populations. There is also some tendency for migrants to come from regions which have a relatively large urban population. Migrants do not appear to come from regions with high educational levels.