Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/oup/restud/v89y2022i3p1557-1592..html
   My bibliography  Save this article

The Gift of Moving: Intergenerational Consequences of a Mobility Shock

Author

Listed:
  • Emi Nakamura
  • Jósef Sigurdsson
  • Jón Steinsson
Abstract
We exploit a volcanic “experiment” to study the costs and benefits of geographic mobility. In our experiment, a third of the houses in a town were covered by lava. People living in these houses were much more likely to move away permanently. For the dependents in a household (children), our estimates suggest that being induced to move by the “lava shock” dramatically raised lifetime earnings and education. While large, these estimates come with a substantial amount of statistical uncertainty. The benefits of moving were very unequally distributed across generations: the household heads (parents) were made slightly worse off by the shock. These results suggest large barriers to moving for the children, which imply that labour does not flow to locations where it earns the highest returns. The large gains from moving for the young are surprising in light of the fact that the town affected by our volcanic experiment was (and is) a relatively high income town. We interpret our findings as evidence of the importance of comparative advantage: the gains to moving may be very large for those badly matched to the location they happened to be born in, even if differences in average income are small.

Suggested Citation

  • Emi Nakamura & Jósef Sigurdsson & Jón Steinsson, 2022. "The Gift of Moving: Intergenerational Consequences of a Mobility Shock," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(3), pages 1557-1592.
    • Handle: RePEc:oup:restud:v:89:y:2022:i:3:p:1557-1592.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/restud/rdab062
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alberto Abadie & Joshua Angrist & Guido Imbens, 2002. "Instrumental Variables Estimates of the Effect of Subsidized Training on the Quantiles of Trainee Earnings," Econometrica, Econometric Society, vol. 70(1), pages 91-117, January.
    2. Bruce Sacerdote, 2012. "When the Saints Go Marching Out: Long-Term Outcomes for Student Evacuees from Hurricanes Katrina and Rita," American Economic Journal: Applied Economics, American Economic Association, vol. 4(1), pages 109-135, January.
    3. Tatyana Deryugina & Laura Kawano & Steven Levitt, 2018. "The Economic Impact of Hurricane Katrina on Its Victims: Evidence from Individual Tax Returns," American Economic Journal: Applied Economics, American Economic Association, vol. 10(2), pages 202-233, April.
    4. Joshua D. Angrist, 2004. "Treatment effect heterogeneity in theory and practice," Economic Journal, Royal Economic Society, vol. 114(494), pages 52-83, March.
    5. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    6. Chang-Tai Hsieh & Peter J. Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1403-1448.
    7. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2005. "Why the Apple Doesn't Fall Far: Understanding Intergenerational Transmission of Human Capital," American Economic Review, American Economic Association, vol. 95(1), pages 437-449, March.
    8. Gharad Bryan & Shyamal Chowdhury & Ahmed Mushfiq Mobarak, 2014. "Underinvestment in a Profitable Technology: The Case of Seasonal Migration in Bangladesh," Econometrica, Econometric Society, vol. 82(5), pages 1671-1748, September.
    9. Black, Sandra E. & Devereux, Paul J., 2011. "Recent Developments in Intergenerational Mobility," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 16, pages 1487-1541, Elsevier.
    10. David Atkin, 2013. "Trade, Tastes, and Nutrition in India," American Economic Review, American Economic Association, vol. 103(5), pages 1629-1663, August.
    11. Kaivan Munshi & Mark Rosenzweig, 2016. "Networks and Misallocation: Insurance, Migration, and the Rural-Urban Wage Gap," American Economic Review, American Economic Association, vol. 106(1), pages 46-98, January.
    12. David Lagakos & Michael E. Waugh, 2013. "Selection, Agriculture, and Cross-Country Productivity Differences," American Economic Review, American Economic Association, vol. 103(2), pages 948-980, April.
    13. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-1160, September.
    14. A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
    15. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 12, pages 1043-1171, Elsevier.
    16. Alwyn Young, 2013. "Inequality, the Urban-Rural Gap, and Migration," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(4), pages 1727-1785.
    17. Charles F. Manski, 1993. "Adolescent Econometricians: How Do Youth Infer the Returns to Schooling?," NBER Chapters, in: Studies of Supply and Demand in Higher Education, pages 43-60, National Bureau of Economic Research, Inc.
    18. Yagan, Danny, 2016. "The Enduring Employment Impact of Your Great Recession Location," Institute for Research on Labor and Employment, Working Paper Series qt12d0w9bs, Institute of Industrial Relations, UC Berkeley.
    19. Raj Chetty & Nathaniel Hendren & Lawrence F. Katz, 2016. "The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment," American Economic Review, American Economic Association, vol. 106(4), pages 855-902, April.
    20. Robert Jensen, 2010. "The (Perceived) Returns to Education and the Demand for Schooling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(2), pages 515-548.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Qingen Gai & Naijia Guo & Bingjing Li & Qinghua Shi & Xiaodong Zhu, 2021. "Migration Costs, Sorting, and the Agricultural Productivity Gap," Working Papers tecipa-693, University of Toronto, Department of Economics.
    2. Jonathan Colmer, 2021. "Temperature, Labor Reallocation, and Industrial Production: Evidence from India," American Economic Journal: Applied Economics, American Economic Association, vol. 13(4), pages 101-124, October.
    3. David Lagakos & Ahmed Mushfiq Mobarak & Michael E. Waugh, 2023. "The Welfare Effects of Encouraging Rural–Urban Migration," Econometrica, Econometric Society, vol. 91(3), pages 803-837, May.
    4. Ager, Philipp & Goñi, Marc & Salvanes, Kjell Gunnar, 2023. "Gender-biased technological change: Milking machines and the exodus of women from farming," Discussion Paper Series in Economics 16/2023, Norwegian School of Economics, Department of Economics.
    5. Colmer, Jonathan, 2018. "Weather, labor reallocation and industrial production: evidence from India," LSE Research Online Documents on Economics 88695, London School of Economics and Political Science, LSE Library.
    6. Joan Hamory & Marieke Kleemans & Nicholas Y Li & Edward Miguel, 2021. "Reevaluating Agricultural Productivity Gaps with Longitudinal Microdata," Journal of the European Economic Association, European Economic Association, vol. 19(3), pages 1522-1555.
    7. Sinha, Rishabh, 2023. "Central America's deindustrialization," Structural Change and Economic Dynamics, Elsevier, vol. 67(C), pages 319-335.
    8. Patrick Bennett & Richard Blundell & Kjell G. Salvanes, 2020. "A second chance? Labor market returns to adult education using school reforms," IFS Working Papers W20/28, Institute for Fiscal Studies.
    9. Mike Waugh & Ahmed Mobarak & David Lagakos, 2016. "Urban-Rural Wage Gaps in Developing Countries: Spatial Misallocation or Efficient Sorting?," 2016 Meeting Papers 1032, Society for Economic Dynamics.
    10. Lagakos, David & Marshall, Samuel & Mobarak, Ahmed Mushfiq & Vernot, Corey & Waugh, Michael E., 2020. "Migration costs and observational returns to migration in the developing world," Journal of Monetary Economics, Elsevier, vol. 113(C), pages 138-154.
    11. Johannes S. Kunz & Kevin E. Staub, 2016. "Subjective Completion Beliefs and the Demand for Post-Secondary Education," SOEPpapers on Multidisciplinary Panel Data Research 878, DIW Berlin, The German Socio-Economic Panel (SOEP).
    12. David McKenzie, 2024. "Fears and Tears: Should More People Be Moving within and from Developing Countries, and What Stops this Movement?," The World Bank Research Observer, World Bank, vol. 39(1), pages 75-96.
    13. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    14. Sebastian Heise & Tommaso Porzio, 2019. "Spatial Wage Gaps and Frictional Labor Markets," Staff Reports 898, Federal Reserve Bank of New York.
    15. De Magalhães, Leandro & Santaeulàlia-Llopis, Raül, 2018. "The consumption, income, and wealth of the poorest: An empirical analysis of economic inequality in rural and urban Sub-Saharan Africa for macroeconomists," Journal of Development Economics, Elsevier, vol. 134(C), pages 350-371.
    16. Tasso Adam & Loren Brandt & Chaoran Chen & Diego Restuccia & Xiaoyun Wei, 2024. "Land Security and Mobility Frictions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 139(3), pages 1941-1987.
    17. Yashiv, Eran, 2020. "Moving from a Poor Economy to a Rich One: The Contradictory Roles of Technology and Job Tasks," IZA Discussion Papers 13131, Institute of Labor Economics (IZA).
    18. Chaoran Chen & Diego Restuccia & Raul Santaeulalia-Llopis, 2022. "The Effects of Land Markets on Resource Allocation and Agricultural Productivity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 45, pages 41-54, July.
    19. Raoul van Maarseveen, 2020. "The urban rural-education gap: do cities indeed make us smarter?," CPB Discussion Paper 412.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    20. Arellano-Bover, Jaime, 2022. "Displacement, Diversity, and Mobility: Career Impacts of Japanese American Internment," The Journal of Economic History, Cambridge University Press, vol. 82(1), pages 126-174, March.

    More about this item

    Keywords

    Geographic mobility; Moving costs; Volcanic eruption;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:restud:v:89:y:2022:i:3:p:1557-1592.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/restud .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.