Mobility, education and labor market outcomes for U.S. graduates: Is selectivity important?

Abstract

The literature on human capital, and its positive effects on individuals and regional economies, is now vast. The linkages between human capital and migration have also found a fertile ground in recent years especially in Europe where many studies have focused on interregional migration of graduates and highly skilled individuals. However, the literature on this phenomenon in the USA is less developed. Using the SESTAT database from NSF, this paper aims at contributing to the understanding of inter-state migration behavior of graduates in the USA and its effects on their career outcomes. It builds on the existing literature not only by focusing specifically on the US context, but also incorporating into the empirical model a correction for the possible selection bias that arises from the dual relationship between migration propensity and human capital endowment. Our estimated Mincerian earning equations, corrected for migrant self-selectivity, show that indeed repeat migration is associated with higher average salaries, while late migration is associated with a salary penalty. As for the other control variables, our results are consistent with what has been found in the labor economics literature. Female workers suffer from a salary penalty, while experience, level of education and employer size are all associated with higher average salaries. The labor market also rewards different fields of study differently.JEL classification: I23, J21, J24, J31, J61, R23

Analyzing Determining Factors of Young Graduates’ Decision to Stay in Lagged Regions

“…An increase in R&D expenditure could affect the economies of scale of outputs, so it is possible to examine whether there are economies of scale with respect to university students using the interaction effect of R&D investment and state-owned universities. In addition, the decision regarding job location of graduates who studied at colleges in lagged regions depended on employment opportunities and high wages [1,2], job security [22], the location of job experience, living cost and self-employment [5,21], and ties with family and the emotional comfort gained from familiarity [7], as shown in Equation 2. A brief description of the variables is summarized in the Appendix A.…”

“…Many studies on urban agglomeration have shown what makes well-educated people move to regions, which helps to fortify the absorptive capacity of regions [2,8,9]. However, attracting well-educated people could be challenging to lagged regions [10].…”

“…Another finding is that young graduates have been widely known to return due to economic benefits [3,10,20]. Ample opportunities for labor performance and high wages were expected to be the main reasons for graduates to return [1,2,21]. They were likely to go back to regions for job security and opportunities to be hired by top research institutes [22], while low unemployment rates did not seem to be an attractive condition.…”

“…In 2019, The New York Times reported that, from 2000 to 2010, knowledgeable workers moved to rural regions in Minnesota, US with ample socioeconomic assets due to the government loan forgiveness program and financial incentives across generations. Many lagged regions attempted to induce well-educated people to return from economically developed regions in order to strengthen regional competitiveness [1,2]. It would be worthwhile finding out what makes young educated people work in lagged regions because workers so rarely return home to lagged regions [3,4].…”

Graduate migration and regional development: an international perspective

“…When looking at migration benefits, it is important to remember that migrants are also self-selected (Détang-Dessendre et al, 2004;Kazakis and Faggian, 2016) and hence not representative of the general population. For instance, students with higher grades and qualifications from more prestigious universities, having more employment options upon graduation, tend to be more mobile (Baryla Jr and Dotterweich, 2001;Faggian et al, 2007).…”