Skip to main content

LOCATION-SPECIFIC HUMAN CAPITAL, LOCATION CHOICE AND AMENITY DEMAND

Buy Article:

$51.00 plus tax (Refund Policy)

Abstract:

ABSTRACT. 

The role of amenities in the flow of migrants has long been a subject of debate. This paper advances an original model of amenities that work through household production instead of directly through utility. Area characteristics (amenities) affect household production, causing certain kinds of human capital investments to be rewarded more than others. Area heterogeneity thus makes such investments location-specific. This specificity—along with a period of exogenous location—increases the opportunity costs of moving, diminishes migration flows between dissimilar locations and increases valuation of amenities that were present in the originating area. These theoretical results emphasize people's sorting across areas and thus differ from the results of the standard model of compensating differentials. Empirical tests of the model's predictions using NLSY79 data show that childhood investments affect migration flows in the way proposed by the model.

Document Type: Research Article

DOI: https://doi.org/10.1111/j.1467-9787.2009.00614.x

Affiliations: IZA, Schaumburg-Lippe-Street 5-9, D-53113 Bonn, Germany., Email: dkrupka@iza.org

Publication date: 2009-12-01

  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more