Expected Income and Labor Market Choices of U.S. Married Couples: A Locally Weighted Regression Approach
37 Pages Posted: 8 Nov 2012 Last revised: 17 Sep 2013
Date Written: September 17, 2013
Abstract
This paper applies a locally weighted scatterplot smoothing (loess) method to estimate the spatially heterogeneous wages of demographic groups of workers across precisely defined US labor markets. We estimate a location choice model using data from the National Longitudinal Survey of Youth (NLSY79) using these estimates of labor market specific wages for men and women as determinants of their place of residence. We compare estimates of this model to a model using more aggregated measures of wages and locations from CPS. We show that these more refined definitions of labor markets and demographic groups provide more explanatory power in a simple migration model than less detailed definitions of labor markets and demographic groups.
Keywords: Locally Weighted Regression, Expected Income Hypothesis, Spatial Heterogeneity, Kernel, Migration
JEL Classification: J21, J24, J61
Suggested Citation: Suggested Citation
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