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Migration and market wage risk.

J M Cooper

    Journal of Regional Science
    |November 1, 1994
    PubMed
    Summary

    Labor migration decisions are influenced by wage variability, which provides information about job opportunities. Higher uncertainty about future wages deters migration, especially for risk-averse individuals.

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    Area of Science:

    • Labor Economics
    • Migration Studies
    • Decision Theory

    Background:

    • Individual migration decisions are complex, influenced by economic and non-economic factors.
    • Understanding the role of information, particularly wage variability, is crucial for migration analysis.

    Purpose of the Study:

    • To analyze labor migration by incorporating market wage variability as an information source.
    • To quantify the effects of origin market amenities and wage variability on migration forecasts.

    Main Methods:

    • Utilized a subsample of employed males from the U.S. National Longitudinal Survey of Youth (NLS).
    • Employed econometric methods to estimate the relationship between migration propensities and wage information content.

    Main Results:

    • Empirical results support the theoretical link between migration and the informational content of wages.
    • Demonstrated that wage uncertainty, indicated by forecast precision, deters migration.

    Conclusions:

    • Market wage variability serves as a significant information signal in individual labor migration choices.
    • Risk aversion plays a key role in migration decisions when there is uncertainty about future wages.
    Keywords:
    AmericasDemographic FactorsDeveloped CountriesEconomic FactorsGeographic FactorsLabor MigrationMacroeconomic FactorsMigrationMigration, InternalNorth AmericaNorthern AmericaPopulationPopulation DynamicsUnited StatesWages

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