Studying the Causes and Consequences of Internal Labor Migration Using Survey and Administrative Data Sources

Abstract

This dissertation comprises three chapters. The first chapter motivates the use of a novel data set combining survey and administrative sources for the study of internal labor migration. By following a sample of individuals from the American Community Survey (ACS) across their employment outcomes over time according to the Longitudinal Employer-Household Dynamics (LEHD) database, I construct a measure of geographic labor mobility that allows me to exploit information about individuals prior to their move. This enables me to explore aspects of the migration decision, such as homeownership and employment status, in ways that have not previously been possible. In the second chapter, I use this data set to test the theory that falling home prices affect a worker’s propensity to take a job in a different metropolitan area from where he is currently located. Employing a within-CBSA and time estimation that compares homeowners to renters in their propensities to relocate for jobs, I find that homeowners who have experienced declines in the nominal value of their homes are approximately 12% less likely than average to take a new job in a location outside of the metropolitan area where they currently reside. This evidence is consistent with the hypothesis that housing lock-in has contributed to the decline in labor mobility of homeowners during the recent housing bust. The third chapter focuses on a sample of unemployed workers in the same data set, in order to compare the unemployment durations of those who find subsequent employment by relocating to a new metropolitan area, versus those who find employment in their original location. Using an instrumental variables strategy to address the endogeneity of the migration decision, I find that out-migrating for a new job significantly reduces the time to re-employment. These results stand in contrast to OLS estimates, which suggest that those who move have longer unemployment durations. This implies that those who migrate for jobs in the data may be particularly disadvantaged in their ability to find employment, and thus have strong short-term incentives to relocate.