Semiparametric analysis of German East-West migration intentions: facts and theory

Michael C. Burda · Wolfgang Karl Härdle · Marlene Müller · Axel Werwatz

120 citations0/0 files storedJournal of Applied Econometrics

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Migration and Labor Dynamics Labor market dynamics and wage inequality German Economic Analysis & Policies

Abstract

East–West migration in Germany peaked at the beginning of the 1990s although the average wage gap between Eastern and Western Germany continues to average about 25%. We analyse the propensity to migrate using microdata from the German Socioeconomic Panel. Fitting a parametric Generalized Linear Model (GLM) yields non-linear residual behavior. This finding is not compatible with classical Marshallian theory of migration and motivates the semiparametric analysis. We estimate a Generalized Partial Linear Model (GPLM) where some components of the index of explanatory variables enter non-parametrically. We find the estimate of the non-parametric influence in concordance with a number of alternative migration theories, including the recently proposed option-value-of-waiting theory. © 1998 John Wiley & Sons, Ltd.

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