nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2013‒05‒11
twenty-six papers chosen by
Steve Ross
University of Connecticut

  1. Spatial Segregation and Urban Structure By Pierre M. Picard; Pascal Mossay
  2. The impact of urban amenities on apartment prices in Münster: How important is location within a city? By Hiller, Norbert
  3. The Vulnerability of Minority Homeowners in the Housing Boom and Bust By Patrick Bayer; Fernando Ferreira; Stephen L. Ross
  4. Home-seekers in the housing market By Gaetano Lisi
  5. The Value of Climate Amenities: Evidence from US Migration Decisions By Sinha, Paramita; Cropper, Maureen L.
  6. Pure Ethnic Gaps in Educational Attainment and School to Work Transitions. When Do They Arise? By S. BAERT; B. COCKX
  7. Dynamics of Social Norms in the City By Fabien Moizeau
  8. Varieties of Home Ownership: Ireland’s transition from a socialised to a marketised policy regime By Michelle Norris
  9. Segmented Housing Search By Martin Schneider; Johannes Stroebel; Monika Piazzesi
  10. Automobile Usage and Urban Rail Transit Expansion By Xie, Lunyu
  11. Clusters of Entrepreneurship and Innovation By Aaron Chatterji; Edward L. Glaeser; William R. Kerr
  12. Preventing Youth Violence and Dropout: A Randomized Field Experiment By Sara Heller; Harold A. Pollack; Roseanna Ander; Jens Ludwig
  13. The Housing Problem and Revealed Preference Theory : Duality and an application. By Galichon, Alfred; Ekeland, Ivar
  14. Research cooperation within and across regional boundaries. Does innovation policy add anything? By Alberto Marzucchi; Davide Antonioli; Sandro Montresor
  15. The Effects of the Clean Air Act on Local Industrial Wages By Kim, Kijin
  16. Testing for Persistence in Housing Price-to-Income and Price-to-Rent Ratios in 16 OECD Countries By Christophe Andre; Luis A. Gil-Alana; Rangan Gupta
  17. Adolescent Risk Perception, Substance Use, and Educational Attainment By Ji Yan; Sally Brocksen
  18. Shrinkage of Value-Added Estimates and Characteristics of Students with Hard-to-Predict Achievement Levels. By Mariesa Herrmann; Elias Walsh; Eric Isenberg; Alexandra Resch
  19. Corruption and Infrastructure at the Country and Regional Level By Gillanders, Robert
  20. Sectoral gross value-added forecasts at the regional level: Is there any information gain? By Lehmann, Robert; Wohlrabe, Klaus
  21. Improving the Economic Situation of Young People in France By Hervé Boulhol
  22. The Cost of Segregation in Social Networks By Nizar Allouch
  23. The Heterogeneous Effects of Workforce Diversity on Productivity, Wages and Profits By Garnero, Andrea; Rycx, Francois
  24. Analysis of different cost allocation methods in a collaborative transport setting By Vanovermeire Ch.; Vercruysse D.; Sörensen K.
  25. Assessing Municipal Bond Default Probabilities By Holian, Matthew; Joffe, Marc
  26. Workers on the move: migrated labour in post-reform india By Majumder, Rajarshi

  1. By: Pierre M. Picard (CREA, University of Luxembourg and CORE, Université Catholique de Louvain); Pascal Mossay (Department of Economics, University of Reading and CORE)
    Abstract: In this paper, we study social interactions between two populations of individuals living in a city. Agents consume land and benefit from intra- and inter-group social interactions. We show that in equilibrium segregation arises: populations get separated in distinct spatial neighborhoods. Two- and three-district urban structures are characterized. For high population ratios or strong inter-group interactions, only a three-district city exists. In other cases, multiplicity of equilibria arises. Moreover, for sufficiently low population ratios or very weak inter-group interactions, all individuals agree on which spatial equilibrium is best.
    Keywords: social interaction, segregation, multiple centers, urban districts
    JEL: R12 R14 R31
    Date: 2013
  2. By: Hiller, Norbert
    Abstract: Beside the specific object attributes, location is the fundamental determinant for real estate. But how important is location within a city? Contrary to popular belief our results suggest that this parameter explains only a small proportion of price variation, whereas object attributes are crucial. Location, location, location does not capture the essence of an apartment value. In a city it is only an explanation part which has relative little impact on price variations. Therefore, we suggest size, age, location as comprehensive determinants for local apartment prices. --
    Keywords: Amenities,Hedonic Method,Real Estate and Urban Economics,Factor Analysis,Relative Importance
    Date: 2013
  3. By: Patrick Bayer; Fernando Ferreira; Stephen L. Ross
    Abstract: This paper examines mortgage outcomes for a large, representative sample of individual home purchases and refinances linked to credit scores in seven major US markets in the recent housing boom and bust. Among those with similar credit scores, black and Hispanic homeowners had much higher rates of delinquency and default in the downturn. These differences are not readily explained by the likelihood of receiving a subprime loan or by differential exposure to local shocks in the housing and labor market and are especially pronounced for loans originated near the peak of the boom. Our findings suggest that those black and Hispanic homeowners drawn into the market near the peak were especially vulnerable to adverse economic shocks and raise serious concerns about homeownership as a mechanism for reducing racial disparities in wealth.
    JEL: J15 R2
    Date: 2013–05
  4. By: Gaetano Lisi (Centro di Analisi Economica CREAtività e Motivazioni)
    Abstract: This housing market matching model considers two types of home seekers: people who search for a house both in the rental and in the homeownership market, and people who only search in the homeownership market. The house-search process leads to several types of matching and in turn this implies different prices of equilibrium. Also, the house-search process connects the rental market with the homeownership market. This model is thus able to explain both the relationship between the rental price and the selling price and the price dispersion which exists in the housing market. Furthermore, this theoretical model can be used to study the impact of taxation in the two markets. Precisely, it is straightforward to show the effects of two different taxes: the tax on property sale and the tax on rental income.
    Keywords: rental market, homeownership market, housing prices.
    JEL: R21 R31 J63
    Date: 2013–04
  5. By: Sinha, Paramita; Cropper, Maureen L. (Resources for the Future)
    Abstract: We value climate amenities by estimating a discrete location choice model for households that changed metropolitan statistical areas (MSAs) between 1995 and 2000. The utility of each MSA depends on location-specific amenities, earnings opportunities, housing costs, and the cost of moving to the MSA from the household’s 1995 location. We use the estimated trade-off between wages and climate amenities to value changes in mean winter and summer temperatures. At median temperatures for 1970 to 2000, a 1°F increase in winter temperature is worth less than a 1° decrease in summer temperature; however, the reverse is true at winter temperatures below 25°F. These results imply an average welfare loss of 2.7 percent of household income in 2020 to 2050 under the B1 (climate-friendly) scenario from the special report on emissions scenarios (Intergovernmental Panel on Climate Change 2000), although some cities in the Northeast and Midwest benefit. Under the A2 (more extreme) scenario, households in 25 of 26 cities suffer an average welfare loss equal to 5 percent of income.
    Keywords: climate amenities, discrete choice models, migration, welfare impacts of temperature changes
    JEL: Q5 Q51
    Date: 2013–01–03
  6. By: S. BAERT; B. COCKX
    Abstract: This article decomposes the observed gaps in educational attainment and school-to-work transitions between grandchildren of natives and immigrants in Belgium into (i) differences in observed family endowments and (ii) a residual “pure ethnic gap”. It innovates by explicitly taking delays in educational attainment into account, by identifying the moments at which the pure ethnic gaps arise, by disentangling the decision to continue schooling at the end of a school year from the achievement within a particular grade, and by integrating the language spoken at home among observed family endowments. The pure ethnic gap in educational attainment is found to be small if delays are neglected, but substantial if not and for school-to-work transitions. It is shown that morethan 20% of the pure ethnic gap in graduating from secondary school without delay originates in tenth grade. Language usage explains only part of the gap in school-to-work transitions for low educated.
    Keywords: dynamic discrete choice, dynamic selection bias, educational attainment, school-to-work transitions, ethnic minorities, discrimination.
    JEL: C35 J15 J70
    Date: 2013–02
  7. By: Fabien Moizeau (CREM CNRS UMR 6211, University of Rennes 1, Condorcet Center and Institut Universitaire de France (IUF))
    Abstract: We study how in a city either opposite social norms remain or a particular code of behavior spreads and ultimately prevails. We develop a multicommunity model with overlapping generations. When young, an individual chooses the level of educational e¤ort. The crucial feature is that her decision is inuenced by peers living in the area who favor either a social norm valuing education or a social norm discrediting education. When an adult, an individual who cares about her o¤springs expected income chooses the familys location. Endogenous location leads to di¤erent patterns of social norms in the city. We identify two types of urban equilibrium: a culturally-balanced city where social norms are distributed evenly among urban areas and the rate of education is the same in each urban area and a culturally-divided city where urban areas oppose on their prevailing social norm and exhibit di¤erent rates of education. We then study the dynamics of social norms. We show that there are multiple long-run patterns of social norms. A particular steady state is achieved depending on the initial distribution of social norms support in the population. Finally, we show that the public policies promoting social integration can lead in the long run to a population unanimously discrediting education and getting less education than letting the culturally-divided city arise.
    Date: 2013–04
  8. By: Michelle Norris (School of Applied Social Science University College Dublin)
    Abstract: This paper examines government subsidisation of home ownership in Ireland since the start of the 20th Century. It argues that during the first two thirds of this period, Ireland slowly assembled government home ownership supports of such scale – in terms of the generosity of subsidies, their universal availability and the variety of policy instruments employed in the promotion this tenure – that they equated to a socialised home ownership regime. This helped to raise home ownership to ‘super normal’ levels, initially in the countryside and then in urban areas, by enabling the vast majority of all income groups, even the poorest, to purchase a home. During the 1970s and particularly the 1980s this socialised home ownership system was marketised as universal government subsidies were initially targeted and then abolished, government’s role as a developer/enabler of home owner housing was ended and the mortgage lending system was privatised and then deregulated. The implications of this policy redirection were is guised for a period by low real house price inflation compared to wages. However when the economy started to recover during the late 1990s these implications became clear – the ‘super normal’ home ownership rates underpinned by the socialised regime declined and reverted to ‘normal’ market rates
    Keywords: housing policy regimes, home ownership, Ireland
    JEL: H2 N4 R31
    Date: 2013–04–30
  9. By: Martin Schneider (Stanford University); Johannes Stroebel (Stanford University); Monika Piazzesi (Stanford University)
    Abstract: This paper documents stylized facts on buyer and seller behavior across different segments of the housing market, and uses them to inform a search model with heterogeneous houses.
    Date: 2012
  10. By: Xie, Lunyu
    Abstract: Using individual travel diary data collected before and after the rail transit coverage expansion in urban Beijing, this paper estimates the impact of rail accessibility improvement on the usage of rail transit, automobiles, buses, walking, and bicycling, measured as percent distance traveled by each mode in an individual trip. My results indicate that the average rail transit usage significantly increased, by 98.3% for commuters residing in the zones where the distances to the nearest station decreased because of the expansion, relative to commuters in the zones where the distances did not change. I also find that auto usage significantly decreased, by 19.8%, while the impact on bus usage was small and not statistically significant. Average walking and bicycling distance (combined) increased by 11.8%, indicating that walking and bicycling are complements to urban rail transit, instead of substitutes. Furthermore, I find that estimated changes in auto usage and rail transit usage vary significantly with auto ownership and income.
    Keywords: travel mode, urban rail transit, traffic diversion, travel diary data
    JEL: D12 H43 H54 Q53 R22 R41 R42
    Date: 2012–12–11
  11. By: Aaron Chatterji; Edward L. Glaeser; William R. Kerr
    Abstract: This paper reviews recent academic work on the spatial concentration of entrepreneurship and innovation in the United States. We discuss rationales for the agglomeration of these activities and the economic consequences of clusters. We identify and discuss policies that are being pursued in the United States to encourage local entrepreneurship and innovation. While arguments exist for and against policy support of entrepreneurial clusters, our understanding of what works and how it works is quite limited. The best path forward involves extensive experimentation and careful evaluation.
    JEL: H70 L26 L52 L53 M13 O25 O38 R00 R10 R12 R50
    Date: 2013–05
  12. By: Sara Heller; Harold A. Pollack; Roseanna Ander; Jens Ludwig
    Abstract: Improving the long-term life outcomes of disadvantaged youth remains a top policy priority in the United States, although identifying successful interventions for adolescents – particularly males – has proven challenging. This paper reports results from a large randomized controlled trial of an intervention for disadvantaged male youth grades 7-10 from high-crime Chicago neighborhoods. The intervention was delivered by two local non-profits and included regular interactions with a pro-social adult, after-school programming, and – perhaps the most novel ingredient – in-school programming designed to reduce common judgment and decision-making problems related to automatic behavior and biased beliefs, or what psychologists call cognitive behavioral therapy (CBT). We randomly assigned 2,740 youth to programming or to a control group; about half those offered programming participated, with the average participant attending 13 sessions. Program participation reduced violent-crime arrests during the program year by 8.1 per 100 youth (a 44 percent reduction). It also generated sustained gains in schooling outcomes equal to 0.14 standard deviations during the program year and 0.19 standard deviations during the follow-up year, which we estimate could lead to higher graduation rates of 3-10 percentage points (7-22 percent). Depending on how one monetizes the social costs of crime, the benefit-cost ratio may be as high as 30:1 from reductions in criminal activity alone.
    JEL: I24 I3 K42
    Date: 2013–05
  13. By: Galichon, Alfred (Département d'économie); Ekeland, Ivar (Université Paris-Dauphine - Paris IX)
    Abstract: This paper exhibits a duality between the theory of revealed preference of Afriat and the housing allocation problem of Shapley and Scarf. In particular, it is shown that Afriat’s theorem can be interpreted as a second welfare theorem in the housing problem. Using this duality, the revealed preference problem is connected to an optimal assignment problem, and a geometrical characterization of the rationalizability of experiment data is given. This allows in turn to give new indices of rationalizability of the data and to define weaker notions of rationalizability, in the spirit of Afriat’s efficiency index.
    JEL: D11
    Date: 2012–10
  14. By: Alberto Marzucchi (Catholic University of Milan); Davide Antonioli (University of Ferrara); Sandro Montresor (JRC-IPTS)
    Abstract: The paper aims to show how policy makers can stimulate firms' cooperation with research organisations in innovation. We argue that the administration of an R&D subsidy can be effective. Furthermore, this should be more so for extra-regional than intra-regional cooperation. The firms' propensity to extend cooperation across the region is assumed to increase with the amount of support. However, the support must overcome a threshold, for firms to cover the fixed costs of distant interactions. These research hypotheses are tested with respect to a sample of firms in a region of Italy. Propensity score matching is applied to identify the impact of the subsidy receipt. A generalised propensity score technique is employed to investigate the effect of an increasing amount of support. All the hypotheses are not rejected. Firms' cooperation is policy sensitive, but the size of the support is crucial for its effects.
    Keywords: Industry-Research Cooperation, Regional Innovation Systems, Behavioural Additionality
    JEL: O32 O38 R11 R58
    Date: 2012–11
  15. By: Kim, Kijin
    Abstract: Since the beginning of the Clean Air Act, firms operating in regulated counties have faced with higher costs, which consequently had an impact on local labor markets. This paper investigates the effects of the air quality regulation on local manufacturing wages. Taking into account wage spillover explicitly into the model distinguishes this paper from existing studies in which spillover was ignored or was not a major focus. Using the 1982-2007 Census of Manufactures and the historical pollutant-specific nonattainment status for all counties, I construct the wage model with fixed effects partly based on the model specification in Greenstone (2002). I find the wage reduction in emitters induced by the regulations ranging from 2% to 10% depending on the pollutant, which in the 2005 dollar amount are equivalent to loss of roughly $800~$4,000 a year. I also find that the regulation effects are not uniform across industries: petroleum & coal, chemical & allied products and paper & allied products are influenced most among emitters. I find an evidence of the existence of spillover, but it is not so evident in the preferred fixed effects model.
    Keywords: Wage, Spillover, Clean Air Act, Spatial Panel, Spatial 2SLS, Environmental Economics and Policy,
    Date: 2013
  16. By: Christophe Andre (Economics Department, Organisation for Economic Co-operation and Development (OECD)); Luis A. Gil-Alana (University of Navarra, Faculty of Economics, Edificio Biblioteca, Entrada Este, E-31080 Pamplona, Spain); Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: Housing price-to-income and price-to-rent ratios are among the most widely monitored indicators of housing market conditions. While these ratios tend to fluctuate around a constant level or a mild trend over the long term, they also tend to deviate from these benchmarks for protracted periods. Traditional unit root tests often indicate the presence of a unit root. This paper uses the framework of fractional integration to test the persistence of price-to-income and price-to-rent ratios in a sample of 16 OECD countries spanning four decades. The results indicate that the ratios are highly persistent. The possibility that persistence estimates may be affected by structural breaks in the series is also considered, but evidence of such breaks is found only in a very limited number of cases. Policy action may be required if high price-to-income and price-to-rent ratios have adverse social and economic consequences. Policies should be guided by a careful analysis of the factors behind high ratios.
    Keywords: Housing, Price-to-income ratio, Price-to-rent ratio, Fractional integration, Persistence, Long memory
    JEL: C22 R31
    Date: 2013–05
  17. By: Ji Yan; Sally Brocksen
    Abstract: This paper studies whether adolescents who are more aware of the risks on substance use in the early teenage years are later less likely to turn into binge drinkers or smokers. It also examines if reduction in substance use, due to high risk perception among adolescents, consequently improves their educational achievement. This research is important for two reasons. First, enhancing risk perception of substance use is an important strategy to prevent the youth from binge drinking and smoking. Second, adolescent substance use and educational achievement are key predictors of adulthood outcomes. We apply a bivariate probit model to a large representative dataset which codes youth risk perception, substance use, and educational attainment. The analysis shows high risk perception lowers the likelihood of substance use among the high school seniors. The resulting low alcohol use increases the chance of attending college and decreases the probability of dropping out of high school. The reduction in cigarette use caused by high risk perception has a similar effect on such two educational outcomes. It also increases high school graduation by 22 percent. Overall, this study suggests that enhancing recognition on the hazards of substance use is an effective policy intervention to reduce adolescent binge drinking and smoking, as well as improve educational attainment. Key Words: adolescent risk perception; binge drinking; cigarette smoking; educational attainment
    JEL: I12 I18 J24
    Date: 2013
  18. By: Mariesa Herrmann; Elias Walsh; Eric Isenberg; Alexandra Resch
    Keywords: Value-Added, Estimates, Students, Achievement
    JEL: I
    Date: 2013–04–12
  19. By: Gillanders, Robert
    Abstract: This paper examines the relationship between corruption and infrastructure at both the country and regional level using the World Bank’s Enterprise Surveys data. A statistically significant and considerable relationship is established between the measure of corruption in the macro data and the measures of transportation and electricity infrastructure. Countries with more corruption tend to have worse infrastructure in the eyes of their firms. This link is shown to remain when one uses other measures of corruption and after controlling for GDP per capita, institutional quality and land area. At the regional level, the key result is unchanged. The magnitude and significance of this result is shown to vary by global region. Two stage least squares results, using distance from the equator as an instrument at the macro level support the simple OLS results and allow us to have some confidence that the causality runs from corruption to infrastructure. Finally, it is shown that within country variation in corruption has a significant effect on regional infrastructure.
    Keywords: Corruption, infrastructure, cross country, regional variation
    JEL: D73 H54 O18
    Date: 2013–04–12
  20. By: Lehmann, Robert; Wohlrabe, Klaus
    Abstract: In this paper, we ask whether it is possible to forecast gross-value added (GVA) and its sectoral sub-components at the regional level. We are probably the first who evaluate sectoral forecasts at the regional level using a huge data set at quarterly frequency to investigate this issue. With an autoregressive distributed lag model we forecast total and sectoral GVA for one of the German states (Saxony) with more than 300 indicators from different regional levels (international, national and regional) and additionally make usage of different pooling strategies. Our results show that we are able to increase forecast accuracy of GVA for every sector and for all forecast horizons compared to an autoregressive process. Finally, we show that sectoral forecasts contain more information in the short term (one quarter), whereas direct forecasts of total GVA are preferable in the medium (two and three quarters) and long term (four quarters).
    Keywords: regional forecasting; gross value added; leading indicators; forecast combination; disaggregated forecasts
    JEL: C32 C52 C53 E37 R11
    Date: 2013–05–06
  21. By: Hervé Boulhol
    Abstract: The economic situation of young people is unsatisfactory. Educational inequalities have been widening for over a decade, due to a sharp decline in the results of the most highly disadvantaged students. The unemployment rate for the 20-24 age bracket has not dropped below 16% for nearly 30 years. French youth are highly pessimistic about the future and express great distrust of institutions. The social safety net sits uneasily between autonomy and family solidarity and is unfair because young people who are unemployed and have no solid financial backing from their families find themselves in precarious situations. Positive discrimination in education policies should be given a real priority and education spending rationalised to draw more resources to primary schooling. The autonomy of universities should be increased, as should the financial independence of young people. The workings of the labour market, some features of which penalise new entrants, need to be reformed and youth employment services enhanced. This Working Paper relates to the 2013 OECD Economic Review of France (
    Keywords: unemployment, education, France, employment, tertiary education, primary education, labour market, youth, school failure, school-to-work transition
    JEL: H52 I21 I24 I25 J20 J30
    Date: 2013–04–05
  22. By: Nizar Allouch (Queen Mary, University of London)
    Abstract: This paper investigates the private provision of public goods in segregated societies. While most research agrees that segregation undermines public provision, the findings are mixed for private provision: social interactions, being strong within groups and limited across groups, may either increase or impede voluntary contributions. Moreover, although efficiency concerns generally provide a rationale for government intervention, surprisingly, little light is shed in the literature on the potential effectiveness of such intervention in a segregated society. This paper first develops an index based on social interactions, which, roughly speaking, measures the welfare impact of income redistribution in an arbitrary society. It then shows that the proposed index vanishes when applied to large segregated societies, which suggests an "asymptotic neutrality" of redistributive policies.
    Keywords: Public goods, Segregated society, Private provision, Networks, Bonacich transfer index
    JEL: C72 D31 H41
    Date: 2013–05
  23. By: Garnero, Andrea (Paris School of Economics); Rycx, Francois (Free University of Brussels)
    Abstract: We estimate the impact of workforce diversity on productivity, wages and productivity-wage gaps (i.e. profits) using detailed Belgian linked employer-employee panel data. Findings, robust to a large set of covariates, specifications and econometric issues, show that educational (age) diversity is beneficial (harmful) for firm productivity and wages. The consequences of gender diversity are found to depend on the technological/knowledge environment of firms. While gender diversity generates significant gains in high-tech/ knowledge intensive sectors, the opposite result is obtained in more traditional industries. Overall, findings do not point to sizeable productivity-wage gaps except for age diversity.
    Keywords: wages, productivity, labour diversity, linked panel data, GMM
    JEL: D24 J24 J31 M12
    Date: 2013–04
  24. By: Vanovermeire Ch.; Vercruysse D.; Sörensen K.
    Abstract: In collaborative transport, dividing the total cost of the coalition between its different partners is a key issue. However, as each coalition has its own set of preferences and has partners with different characteristics, a cost allocation method suitable in all situations does not exist. In this paper, a set of cost allocation methods, some academic, some used in practice, are evaluated in different situations. We investigate how well these methods behave when partners have different characteristics. E.g., when one partner ships a much larger volume than the others, it is very likely that this partner does not agree to allocate costs according to the volume of each partner. We show which cost allocation methods suce in which situations, showing that a right cost allocation is highly dependent on the characteristics of the coalition.
    Date: 2013–04
  25. By: Holian, Matthew; Joffe, Marc
    Abstract: In response to a request from the California Debt and Investment Advisory Commission, we propose a model to estimate default probabilities for bonds issued by cities. The model can be used with financial data available in Comprehensive Annual Financial Reports that cities are required to publish. The study includes modeled default probability estimates for 261 California cities with population over 25,000. Our model relies on case study evidence, logistic regression analysis of major city financial statistics from the Great Depression – the last time a large number of cities defaulted – as well as logistic regression analysis of more recent city financial statistics. Independent variables in our model include (1) the ratio of interest and pension expenses to total revenue, (2) the annual change in total revenue, (3) the ratio of general fund surplus (or deficit) to general fund revenues and (4) the ratio of general fund balance to general fund expenditures.
    Keywords: municipal bonds, municipal bankruptcy, default probability model
    JEL: C35 H74 R51
    Date: 2013–04–30
  26. By: Majumder, Rajarshi
    Abstract: Migration is a universal phenomenon. From time immemorial women and men have travelled in search of better living. Historical nomadic instinct of man had been in tune with his necessities – more endurable climate, adequate water supply, fertile land and general availability of resources have attracted the human being always. It is expected that with development migration of due to Push factors will decrease while that due to Pull factors will increase. One of the important facets of labour market is therefore the profile of migrant workers and the nature of their movements. In spite of extensive work on migration in Indian context, recent studies on migration in India have focussed mainly on rural-urban migration or on migration from/between specific regions. The present paper explores the post reform nature of migration in India with special focus on migrant workers. Types of movement, profile of migrants vis-a-vis the natives, occupational distribution, and wages received by them have been examined. This has been contrasted with the pre-reform situation. Whether wage setting process is different for migrants is also examined through estimation of the wage function. Results suggest that migration among males are more of an ‘assured’ type rather than a ‘search’ type, in response to regular wage employment, where the better endowed / skilled / trained are moving. Pull factors are definitely playing more important role than push factors in this regard, though in post-reform period push factors have strengthened. Though better-off states with lower incidence of poverty and higher per capita income have higher migration rates, net out migration rates are considerably higher for poorer states indicating that condition of the source region is perhaps the most important factor in migration decisions.
    Keywords: Migration; Wage Setting; Human Capital;
    JEL: J24 J31 O15 R23
    Date: 2012–09–15

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