Family migration and labor market outcomes

Abstract

Job search and migration behavior of married couples differ markedly from that of singles, which suggests that marriage, migration and labor market decisions are interrelated. Interregional moves are associated with higher wages for married men, single men, and single women, but married women do not realize much wage growth through migration and, in fact, are less likely to be employed following a move. The goal of this paper is to assess the implications of joint geographic location constraints on the migration patterns, labor market outcomes and marital stability of men and women. I develop a model of household migration decisions in a dynamic framework with intra-household bargaining and estimate it using data from the Panel Study of Income Dynamics (PSID). The results show that marriage involves compromises for both spouses in terms of foregone job opportunities. However, migration decisions occur more often in response to men's opportunities, in part because women have lower wage offers, a lower arrival rate of offers, and a lower variance in offers. Married women expect migration-induced interruptions in their employment spells, which makes them willing to accept lower wages. When acting as single agents or when there are no geographic location constraints, the accepted wages of both men and women increase considerably. I also find that the possibility of divorce is an important factor in household mobility, as spouses are less willing to make compromises when faced with the possibility of future separation.

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