Working Paper: CEPR ID: DP11085
Authors: Clément Bosquet; Henry G. Overman
Abstract: We consider the link between birthplace and wages. Using a unique panel dataset we estimate a raw elasticity of wage with respect to birthplace size of 4.6%, two thirds of the 6.8% raw elasticity with respect to city size. We consider a number of mechanisms through which this birthplace effect could arise. Our results suggest that inter-generational transmission (sorting) and the effect of birthplace on current location (geography) both play a role in explaining the effect of birthplace. We find no role for human capital formation at least in terms of educational outcomes (learning). Our results highlight the importance of intergenerational sorting in helping explain the persistence of spatial disparities.
Keywords: Lifetime mobility; Place of birth; Spatial sorting
JEL Codes: J31; J61; J62; R23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| birthplace size (J19) | wages (J31) |
| parental social class (I24) | wages (J31) |
| birthplace size (J19) | parental social class (I24) |
| current city size (R12) | wages (J31) |
| birthplace size (J19) | current city size (R12) |
| parental sorting (J12) | wages (J31) |