Semiparametric Estimation of the Role of Intergenerational Mobility in Internal Migration

Abstract

This paper investigates the role of intergenerational mobility in internal migration decisions of families. Geographic variation of intergenerational mobility suggests that if families value their children’s human capital accumulation and future outcomes, they consider intergenerational mobility in migration decisions. Families’ migration choice to an area is assumed to maximize children’s expected outcomes and parents’ utility. We apply the method of semiparametric maximum score estimation to our empirical model, which yields consistent estimators even when families choice sets are partially observed, as is the case in our dataset. We find that highly educated families with school-aged children choose areas that favor upward mobility. Our welfare analysis indicates that a unit increase in the absolute mobility of a commuting zone is equivalent to approximately $685 higher mean wage from the local labor market.

Keywords: Internal migration, Migration rate, Intergenerational mobility, Families with children, Semiparametric estimation

JEL Classification: C14, D10, J62, R23