Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/114142
Authors: 
Hansen, Jörgen
Lkhagvasuren, Damba
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 9258
Abstract: 
We present new evidence on the wage and mobility of young and old workers, which is difficult to explain using standard human capital theory. Instead, we propose a simple dynamic extension of the Roy model, where worker migration and wages are jointly determined at the individual level. According to this model, a higher moving cost among older workers is the main factor driving the lower mobility among this group. Because of the higher moving costs, older workers require a higher wage increase to move across regions than younger workers, a pattern that is consistent with individual-level U.S. data. We also find an interesting dynamic effect suggesting that, given a persistent labor income shock, a higher future moving cost makes workers more mobile today.
Subjects: 
geographic mobility
labor mobility by age
labor income shock
moving cost
multi-sector model
JEL: 
E24
J31
J61
R23
Document Type: 
Working Paper

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