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

See all articles by Thomas A. Mroz

Thomas A. Mroz

Department of Economics, Andrew Young School of Policy Studies

Guo Li

Fannie Mae

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

Mroz, Thomas A. and Li, Guo, Expected Income and Labor Market Choices of U.S. Married Couples: A Locally Weighted Regression Approach (September 17, 2013). Available at SSRN: https://ssrn.com/abstract=2172363 or http://dx.doi.org/10.2139/ssrn.2172363

Thomas A. Mroz

Department of Economics, Andrew Young School of Policy Studies ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

Guo Li (Contact Author)

Fannie Mae ( email )

3900 Wisconsin Ave NW
Washington DC, DC 20003
United States

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