Why Does Birthplace Matter so Much? Sorting, Learning and Geography

37 Pages Posted: 2 Feb 2016

See all articles by Clément Bosquet

Clément Bosquet

Université Paris I Panthéon-Sorbonne - Centre d'Economie de la Sorbonne (CES)

Henry G. Overman

London School of Economics (LSE) - Department of Geography and Environment; Centre for Economic Policy Research (CEPR)

Date Written: January 2016

Abstract

We consider the link between birthplace and wages. Using a unique panel dataset we estimate a raw elasticity of wage with respect to birthplace size of 4.6%, two thirds of the 6.8% raw elasticity with respect to city size. We consider a number of mechanisms through which this birthplace effect could arise. Our results suggest that inter-generational transmission (sorting) and the effect of birthplace on current location (geography) both play a role in explaining the effect of birthplace. We find no role for human capital formation at least in terms of educational outcomes (learning). Our results highlight the importance of intergenerational sorting in helping explain the persistence of spatial disparities.

Keywords: lifetime mobility, place of birth, spatial sorting

JEL Classification: J31, J61, J62, R23

Suggested Citation

Bosquet, Clément and Overman, Henry G., Why Does Birthplace Matter so Much? Sorting, Learning and Geography (January 2016). CEPR Discussion Paper No. DP11085, Available at SSRN: https://ssrn.com/abstract=2726565

Clément Bosquet (Contact Author)

Université Paris I Panthéon-Sorbonne - Centre d'Economie de la Sorbonne (CES) ( email )

106-112 Boulevard de l'hopital
106-112 Boulevard de l'Hôpital
Paris Cedex 13, 75647
France

Henry G. Overman

London School of Economics (LSE) - Department of Geography and Environment ( email )

Houghton Street
London, WC2A 2AE
United Kingdom
+44 20 7955 6581 (Phone)
+44 20 7955 7412 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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