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Conference Paper BHPS-2001 Conference: the 2001 British Household Panel Survey Research Conference, 5-7 July 2001, Colchester, UK

From the dark end of the street to the bright side of the road? Investigating the returns to residential mobility in Britain -conference paper-


Publication date

01 Jul 2000


There are at least two potential economic benefits to moving house for labour market participants. The first relates to earnings from the labour market or income more generally. The second concerns employment. Individuals move either to increase their labour market earnings (a 'contracted' move) in which migration is a result of the job search process, or to increase their likelihood of finding work (a 'speculative' move) in which migration is an intrinsic part of the search for work. Our aim in this paper is to investigate the success of migrants by analysing the returns to migration in terms of earnings and household income more generally. In particular, using data from 1991 to 1997 from the British Household Panel Survey, individuals who move house are identified and their pre- and post-move earnings and household incomes are compared with non-movers.
We examine current household income and current individual labour income at each date of interview t, and their correlation with individuals migration status since the previous date of interview t-1. Controlling for a wide range of individual, area and job related characteristics and household circumstances, as well as taking into account unobserved differences, we are able to assess the impact of moving home, the distance moved and reasons for moving on household income and individual earnings. We also examine time dimensions in the returns to moving home through introducing lagged migration variables. Panel data provide accurate information on earnings and income, migrant status and a wide range of characteristics both before and after any move, and allow individual fixed effects to be eliminated. Descriptive statistics show that movers have higher incomes, both pre- and post move, than non-movers. Moving home is associated with increases in labour market earnings, but small falls in household income. This suggests that migration is a response to more favourable labour market opportunities.
Multivariate analysis shows that heads of households who move between regions experience falls in their household income relative to non-movers, all things equal. These relative income falls are particularly large for heads of households who are unemployed prior to the move. This is an important result as recent research has shown that unemployed individuals have higher rates of regional migration than those in work. Further, although recent movers experience relative falls in their household income, heads of households that moved between regions two years previously have relatively large increases in their household income. This suggests a significant time dimension in the returns to migration at the household level, which can perhaps be explained by other household members searching for suitable work in the new location. Men who move locally are found to receive an earnings premium relative to longer distance migrants and non-movers. Local moves may therefore be a response to wage increases, rather than wage increases resulting from migration.
Our results suggest that there are monetary returns to migration for both household income and labour market earnings. However, not all migrants enjoy these returns, and their magnitude depends on distance moved, family structure, and the employment situation of household members. Perhaps most importantly, a significant time dimension in the returns to migration emerges, emphasising the need for panel data in studies of residential mobility. Using data that are too recent relative to the time of migration will yield misleading results.



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