Semiparametric Estimation of the Role of Intergenerational Mobility in Internal Migration

38 Pages Posted: 14 Feb 2016 Last revised: 20 Feb 2018

See all articles by Jun Sung Kim

Jun Sung Kim

Monash University - Department of Econometrics & Business Statistics

Jongkwan Lee

Korea Development Institute

Date Written: February 19, 2018

Abstract

This paper investigates the role of intergenerational mobility in internal migration decisions of families. Geographic variation of intergenerational mobility suggests that if families value their children’s human capital accumulation and future outcomes, they consider intergenerational mobility in migration decisions. Families’ migration choice to an area is assumed to maximize children’s expected outcomes and parents’ utility. We apply the method of semiparametric maximum score estimation to our empirical model, which yields consistent estimators even when families choice sets are partially observed, as is the case in our dataset. We find that highly educated families with school-aged children choose areas that favor upward mobility. Our welfare analysis indicates that a unit increase in the absolute mobility of a commuting zone is equivalent to approximately $685 higher mean wage from the local labor market.

Keywords: Internal migration, Migration rate, Intergenerational mobility, Families with children, Semiparametric estimation

JEL Classification: C14, D10, J62, R23

Suggested Citation

Kim, Jun Sung and Lee, Jongkwan, Semiparametric Estimation of the Role of Intergenerational Mobility in Internal Migration (February 19, 2018). Available at SSRN: https://ssrn.com/abstract=2731796 or http://dx.doi.org/10.2139/ssrn.2731796

Jun Sung Kim

Monash University - Department of Econometrics & Business Statistics ( email )

Wellington Road
Clayton, Victoria 3168
Australia

Jongkwan Lee (Contact Author)

Korea Development Institute ( email )

263 Namsejong-ro
Sejong, 30149
Korea, Republic of (South Korea)

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