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Migration and Location Choice

Paper Session

Friday, Jan. 3, 2020 8:00 AM - 10:00 AM (PST)

Marriott Marquis, Torrey Pines 1
Hosted By: Econometric Society
  • Chair: Jessie Handbury, University of Pennsylvania

Borrowing Constraints, Migrant Selection, and the Dynamics of Return and Repeat Migration

Joseph-Simon Görlach
,
Bocconi University

Abstract

Higher earnings in a migrant's origin country increase the opportunity cost of migration, but also relax financial constraints. To disentangle these mechanisms and evaluate the effects of earnings on return and repeat migration, I formulate a dynamic model of consumption and location choices. Estimation uses both Mexican and U.S. data sources, and exploits a randomized experiment for identification. I find that an increase in Mexican household earnings shortens migration duration, but raises the average number of migrations. For low-income households, a rise in earnings leads to a more than proportional effect on consumption expenditure in Mexico, arising from repatriated savings.

A Unified Empirical Framework to Study Segregation

Gregorio Caetano
,
University of Georgia
Vikram Maheshri
,
University of Houston

Abstract

We present an empirical framework to study segregation that bridges the empirical literature on residential choice and the theoretical literature on neighborhood segregation. The former literature is based upon equilibrium empirical models of disaggregated choices, whereas the latter literature is concerned with the aggregate phenomenon of segregation, which is often studied theoretically in disequilibrium. Our framework explicitly allows for incomplete information, moving costs, and for the disaggregated households’ choices to be observed out of equilibrium. We also propose novel instrumental variables that exploit the logic of a dynamic choice model and can be constructed with no additional data requirements. A simulation procedure aggregates these choices to characterize the dynamic process of segregation. We illustrate our framework with an analysis of racial segregation of White, Black, Hispanic and Asian homeowners in the San Francisco Bay Area from 1990- 2004. We find that all homeowners react highly heterogeneously to neighbors of different races. Black and Hispanic segregation would increase by around 17% in the absence of any external shocks to the housing market, but White and Asian segregation would increase by only around 7%. Moving costs play a central role in keeping segregation at bay by maintaining a mismatch between the desired and the current neighborhoods of many households. This mismatch is mostly sustained by neighborhood amenities other than racial composition.

Mobility Constraints and Labor Market Outcomes: Evidence from Credit Lotteries

Armando Gomes
,
Washington University-St. Louis
David Schoenherr
,
Princeton University
Janis Skrastins
,
Washington University-St. Louis
Bernardus Van Doornik
,
Central Bank of Brazil

Abstract

This paper assesses the role of vehicle ownership in reducing spatial mismatch between employers and employees. We exploit random time-series variation in the allocation of motorcycles through lotteries among participants in a financial product in Brazil. We find that individuals exhibit higher employment, earnings, and business ownership, and commute further after obtaining a motorcycle compared to participants who have not yet won a motorcycle. Early lottery winners still exhibit superior outcomes five years after all participants have been awarded a motorcycle. Consistent with a reduction in spatial mismatch, the effects are strongest for individuals residing in areas with sparse public transportation and local labor markets. A lower incidence of job separations and a higher probability of being employed on a permanent contract after winning a motorcycle suggest that expanding the number and scope of potential employment opportunities through motorcycle ownership leads to more stable employer-employee

Residential Segregation and Ethnicity

Alice Kügler
,
University College London

Abstract

How do changes in the ethnic residential composition affect local neighbourhoods? A change in social housing allocations in the early 1990s serves as instrument for changes in ethnic composition at the level of small neighbourhoods in England and Wales. Using new detailed Census data from 1991 to 2011, I estimate the effect of composition changes from variation across neighbourhoods within cities. The results imply that an exogenous increase in social housing minority share by 10 percentage points raises the minority share in private housing by 1.2 percentage points. This effect is larger for privately rented than for privately owned housing. I further show that an increase in the minority share leads to higher local population growth and a small decrease in house prices in the longer run.
JEL Classifications
  • R2 - Household Analysis