Cultural Biases in Migration: Estimating Non-Monetary Migration Costs

40 Pages Posted: 30 Mar 2015

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

Abstract

Ever since Sjaastad (1962), researchers have struggled to quantify the psychic costs 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 and those who earn above average occupational wages before migration, more pronounced for geographically short moves, and persistent over time.

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

JEL Classification: D51, J61, R23

Suggested Citation

Falck, Oliver and Lameli, Alfred and Ruhose, Jens, Cultural Biases in Migration: Estimating Non-Monetary Migration Costs. IZA Discussion Paper No. 8922, Available at SSRN: https://ssrn.com/abstract=2586425 or http://dx.doi.org/10.2139/ssrn.2586425

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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