Self-selection and Internal Migration in the United States

"Within the conceptual framework of the Roy model, this paper provides an empirical analysis of internal migration flows [in the United States] using data from the National Longitudinal Survey of Youth. The theoretical approach highlights regional differences in the returns to skills: regions that pay higher returns to skills attract more skilled workers than regions that pay lower returns. Our empirical results suggest that interstate differences in the returns to skills are a major determinant of both the size and skill composition of internal migration flows. Persons whose skills are most mismatched with the reward structure offered by their current state of residence are the persons most likely to leave that state, and these persons tend to relocate in states which offer higher rewards for their particular skills."