Education and geographical mobility: the role of the job surplus
Better educated workers accept many more long-distance job offers, and relocate quicker following local shocks. I attribute this to a fundamental feature of their labor market experience, unrelated to geography: large returns to job match quality. If a good offer happens to originate from far away, the match surplus is then more likely to justify the cost of moving. This ?lubricates? labor markets spatially. Using wage transition data (and a jobs ladder model), I show this can explain the bulk of mobility differentials. These differentials can be closed by subsidizing long-distance matches, and I quantify the cost of doing so.
1 November 2024
American Economic Journal: Economic Policy 16(4) , pp.341-381, 2024
https://www.aeaweb.org/articles?id=10.1257/pol.20230279&within=&page=594
This Journal article is published under the centre's Community Wellbeing programme.