Academic journal article Journal of Regional Analysis & Policy

Does Economic Freedom Lead to Selective Migration by Education?

Academic journal article Journal of Regional Analysis & Policy

Does Economic Freedom Lead to Selective Migration by Education?

Article excerpt

Abstract. Using a spatial Durbin model (SDM), we estimate the migratory response of those with various levels of education to state differences in economic freedom. We find that states with greater overall economic freedom attract those with a secondary education and, to a lesser extent, those with some college experience. States with greater government expenditures as a percent of Gross State Product witness a net in-migration of those with college experience and out-migration of those with only an elementary education. The opposite is true for transfers and subsidies. States with greater union density witness non-selective out-migration.

1. Introduction

Tiebout's 1956 paper explains why people "vote with their feet" and move "to that community whose local government best satisfies [their] set of preferences." Following Tiebout's insight, a vast lit- erature exists on how policy differences and changes alter both the number and characteristics of those who live in a jurisdiction (Greenwood, 1997). One line of research focuses on the overall migratory re- sponse to differences in economic and political free- dom (Ashby, 2007; Barkley and McMillan, 1994). These works have not, however, looked at whether the migratory response to economic freedom differs on the basis of the potential migrants' educational background.

Policymakers in states such as California and Pennsylvania are particularly concerned about "brain drain" or the out-migration pattern of highly skilled college graduates (Johnson and Reed, 2007). Meanwhile other states, such as Colorado, have been touting the net inflows of college graduates (Metro Denver Economic Development Corporation, 2010). Some states, such as Maine, have instituted college loan repayment plans for some college graduates that stay and work in the state upon gradua- tion (Opportunity Maine, 2010). Pennsylvania developed the "Stay and Invent the Future" grant program for businesses to promote regional oppor- tunities for recent graduates (Stay Invent Central Pennsylvania, 2010). The selective migration that these programs seek to address may be associated with overall differences in the economic freedom granted to citizens of various states.

Using data on migrants by educational level from the Integrated Public Use Microdata Series (IPUMS) of the 2000 Census, we show that states that score higher in an economic freedom index attract indi- viduals with at most a secondary education and, to a lesser extent, those with some college experience. States with greater government expenditures as a percent of Gross State Product (GSP) witness an in- migration of those with college experience and an out-migration of those with only an elementary education. The opposite is true for transfers and subsidies. States with greater union representation witness a net out-migration of individuals from all three education categories: elementary, secondary, and at least some college.

The underlying determinants that attract or repel potential migrants to or from one state may induce regional spillovers that affect migration patterns of neighboring states. Given our estimation strategy, we also find that polices of bordering states appear to influence the composition of a state's migrants. Approximately 23 percent of the total migratory re- sponse of those with a secondary education is due to the economic freedom of neighboring states. For those with some college education the percent of the response increases to 29 percent.

The following section discusses previous work on the economic determinants of migration as well as the relationship between economic freedom and migration. The third section discusses the spatial Durbin estimation methodology. Section IV intro- duces the data and discusses the components of the economic freedom index. Section V presents the results of the estimation using the overall economic freedom index, and section VI presents the results using the components of the economic freedom index. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.