The price of mobility

This paper addresses the question concerning the price of geographic mobility in various labour market and migration scenarios. Pivotal points are expected mobility premiums which are sufficient to tip the scales in favour of moving to a geographically distinct location. These premiums are first derived within a theoretical model, accounting not only for location-specific amenity levels or labour market conditions, but also for heterogeneous personality traits and preferences. Derived hypotheses demonstrate that—in presence of heterogeneous psychic costs or adjustment capabilities—expected mobility premiums can remain distinctly positive even in an unemployment scenario. Furthermore, adjustment capabilities are to a large extent related to earlier mobility experiences, implying that labour mobility is partially learnable

US State Economic Freedom and the Labor Supply of Young Workers

Abstract Matching panel data drawn from the National Longitudinal Survey of Youth 1979 to the state-level index of economic freedom published in Economic Freedom of North America 2010, this study examines the empirical relationship between the degree of economic freedom in US states and individual labor supply. OLS estimation identifies a positive correlation between economic freedom and annual hours worked. However, this relationship disappears when the model accounts for time-invariant person-specific fixed effects. Although states with higher degrees of economic freedom appear to generate higher productivity and therefore labor earnings potential among workers, most workers do not increase their hours of work in response

A Longitudinal Analysis of the Impact of State Economic Freedom on Individual Wages

Matching panel data drawn from the National Longitudinal Survey of Youth 1979 to the state-level index of economic freedom published in Economic Freedom of North America 2010, this study establishes an empirical relationship between wages at the individual level and the degree of state economic freedom. In OLS models, a one standard deviation improvement in the state economic freedom score is found to increase wages by 2.5 percent. Models that con-trol for both person-specific and state-level fixed effects reveal a wage increase of more than 8 percent. Significant variation in wage gains is found across the different areas used to con-struct the economic freedom measure as well as across broad worker characteristics like race and schooling level

Do Neighborhoods Affect Hours Worked? Evidence from Longitudinal Data

Using a confidential version of the NLSY79, we estimate large effects of neighborhood social characteristics and job proximity on labor market activity. A variety of neighborhood social characteristics are associated with less market work. Social characteristics have nonlinear effects, with the greatest impact in the worst neighborhoods. Social characteristics are also more important for less-educated workers. Exploiting the panel aspects of our data, we find that estimates that do not account for neighborhood selection on the basis of time-invariant and time-varying unobserved individual characteristics substantially overstate the social effects of neighborhoods but understate the effects of job access.