Week 1 Notes
Popular in Regional Economics
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This 2 page Class Notes was uploaded by Sophie_ on Monday April 11, 2016. The Class Notes belongs to AEDE 3680 at Ohio State University taught by Alessandra Faggian in Spring 2016. Since its upload, it has received 85 views. For similar materials see Regional Economics in Economcs at Ohio State University.
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Date Created: 04/11/16
AEDE 3680 Midterm 1 Study Guide Regional Economics & Sustainable Growth LECTURE 6 Interregional Migration o It is relatively easier for people to migrate than for firms to migrate. o Migration rates in Europe and in other countries have traditionally been lower than in the United States. o Significant differences between countries in Europe. Why do people migrate? o Normally they migrate because of job-related reasons, but more generally…people compare benefits and costs of migrating and migrate if the net present value of a migration movement is POSITIVE. Various factors influence the net present value of migration. These factors, also called determinants of migration, include: 1. Individual characteristics a. Age b. Family circumstances c. Education 2. Regional characteristics a. Unemployment rates b. Real earnings c. Amenities 3. Other characteristics a. Distance between origin and destination b. Business cycle 1a. Age o Older people are less likely to migrate, for several reasons: Fewer years to recoup investment costs; Higher level of specific, nontransferable human capital; Higher psychological costs e.g. network of friends and family; Higher migration costs e.g. hiring professional movers rather than moving possessions yourself; People are most mobile after completing lengthy investments in human capital (college education, etc). o The only exception to this is retirement migration. Migration can be age-selective. Implications: certain states might get older and others younger because of the population redistribution due to internal migration. 1b. Family Factors o The potential costs of migrating multiply as family size increases. Married workers migrate less than single workers do; The presence of school-aged children reduces migration; If both spouses work, migration is less likely…(two-body problem) 1c. Education o Empirical studies have shown that those with a higher level of education (e.g. graduates) are more likely to migrate. Expansion of search radius—individuals invest in education in anticipation of higher future returns, e.g. better quality and higher-paying jobs, but such jobs are less common; Lower information costs—more educated people have a superior ability to process and find information efficiently; Less psychological costs—less educated people rely more on family and friends than the better educated; Repeat migration—educated people have already moved for their jobs, so they’re more inclined to move again to find a job (path-dependency, etc). Education and migration both represent investments in human capital & there are “economies of scale” in combining the two. Classifications (shortened name)—common categories 1. Repeat migration (RE)—women, higher grade (HK), younger 2. Return migration (RT)—men, arts, older, lower grade (HK) 3. University stayer (US)—men, younger 4. Late migrant (LM)—higher grade, older ethnic minorities, social sciences 5. Non migrant (NM)—women, older ethnic minorities
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