Interpreting migration through the prism of reasons for moves: What can we learn about the economic returns to migration from survey data?

PWP-CCPR-2012-017

Abstract

In the classic model of migration, flows across labor markets occur in response to higher real wages - households move to improve their returns to labor. This paper provides evidence that this conceptualization, while still useful, is an oversimplification of the migration process as a whole. Those who change labor markets and report that they moved for a job do make modestly greater returns than those who cite other reasons for moving. There is a hierarchy of returns with the greatest gains for those who move between the labor markets of the largest cities in Australia. That those who cite reasons other than jobs for their moves also make gains and often gains which are not markedly less than labor market migrants, suggests that any wage growth premium from migration may be ancillary rather than central. The paper argues that because life style, family, housing and community are increasingly the reason for migration, jobs are essentially the context within which migration takes place rather than a way of increasing human capital per se.