The Wage Dynamics of Internal Migration within the United States

Using an extended panel of data from the National Longitudinal Survey of Youth 1979 (NLSY79), this study demonstrates that young interstate migrants receive significant positive returns to geographic mobility. Pecuniary returns generally accumulate over a five year period following migration, during which migrants experience superior wage growth vis-a-vis non-migrants. Fixed-effects estimates suggest that migrants collect a post-migration wage premium of nearly 5 percent. Because fixed-effects estimation accounts for correlation between migration and unobservable individual-specific characteristics (typically referred to as "ability"), the positive effect of migration on wages can not be explained by the hypothesis that the migrant sample are drawn from the upper tail of the ability distribution.