The Cost of Migrating to a Culturally Different Location

29 Pages Posted: 9 Oct 2014

See all articles by Oliver Falck

Oliver Falck

CESifo (Center for Economic Studies and Ifo Institute) - Department Human Capital and Innovation

Alfred Lameli

University of Marburg

Jens Ruhose

Leibniz Universität Hannover - Faculty of Economics and Management

Date Written: September 30, 2014

Abstract

Ever since Sjaastad (1962), researchers have struggled to quantify the psychic cost of migration. We monetize psychic cost as the wage premium for moving to a culturally different location. We combine administrative social security panel data with a proxy for cultural difference based on historical dialect dissimilarity between German counties. Conditional on geographic distance and pre-migration wage profiles, we find that migrants demand a (indexed with respect to local rents) wage premium of about 1 (1.5) percent for overcoming one standard deviation in cultural dissimilarity. The effect is driven by males, more pronounced for geographically short moves, and persistent over time.

Keywords: migration costs, culture, internal migration, psychic cost

JEL Classification: D510, J610, R230

Suggested Citation

Falck, Oliver and Lameli, Alfred and Ruhose, Jens, The Cost of Migrating to a Culturally Different Location (September 30, 2014). CESifo Working Paper Series No. 4992, Available at SSRN: https://ssrn.com/abstract=2507751 or http://dx.doi.org/10.2139/ssrn.2507751

Oliver Falck (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Department Human Capital and Innovation ( email )

Poschingerstr. 5
Munich, 81679
Germany

Alfred Lameli

University of Marburg ( email )

Jens Ruhose

Leibniz Universität Hannover - Faculty of Economics and Management ( email )

Koenigsworther Platz 1
Hannover, 30167
Germany

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