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Why Does Birthplace Matter So Much? Sorting, Learning and Geography

Author

Listed:
  • Clément Bosquet
  • Henry G. Overman

Abstract

We consider the link between birthplace and wages. Using a unique panel dataset we estimate a raw elasticity of wage with respect to birthplace size of 4.6%, two thirds of the 6.8% raw elasticity with respect to city size. We consider a number of mechanisms through which this birthplace effect could arise. Our results suggest that inter-generational transmission (sorting) and the effect of birthplace on current location (geography) both play a role in explaining the effect of birthplace. We find no role for human capital formation at least in terms of educational outcomes (learning). Our results highlight the importance of intergenerational sorting in helping explain the persistence of spatial disparities.

Suggested Citation

  • Clément Bosquet & Henry G. Overman, 2016. "Why Does Birthplace Matter So Much? Sorting, Learning and Geography,"SERC Discussion Papers 0190, Centre for Economic Performance, LSE.
    • Handle:RePEc:cep:sercdp:0190
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    File URL:http://cep.lse.ac.uk/pubs/download/sercdp0190.pdf
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    References listed on IDEAS

    as
    1. D'Costa, Sabine & Overman, Henry G., 2014."The urban wage growth premium: Sorting or learning?,"Regional Science and Urban Economics, Elsevier, vol. 48(C), pages 168-179.
    2. Samuel Bowles & Herbert Gintis, 2002."The Inheritance of Inequality,"Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 3-30, Summer.
    3. Giordano Mion & Paolo Naticchioni, 2009."The spatial sorting and matching of skills and firms,"Canadian Journal of Economics, Canadian Economics Association, vol. 42(1), pages 28-55, February.
    4. Stephen Gibbons & Henry G. Overman & Panu Pelkonen, 2014."Area Disparities in Britain: Understanding the Contribution of People vs. Place Through Variance Decompositions,"Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(5), pages 745-763, October.
    5. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent & Roux, Sébastien, 2012."Sorting and local wage and skill distributions in France,"Regional Science and Urban Economics, Elsevier, vol. 42(6), pages 913-930.
    6. Olof Åslund & Dan-Olof Rooth, 2007."Do when and where matter? initial labour market conditions and immigrant earnings,"Economic Journal, Royal Economic Society, vol. 117(518), pages 422-448, March.
    7. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent, 2008."Spatial wage disparities: Sorting matters!,"Journal of Urban Economics, Elsevier, vol. 63(2), pages 723-742, March.
    8. repec:hal:pseose:halshs-00754585 is not listed on IDEAS
    9. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014."Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States,"The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1553-1623.
    10. Rebecca Diamond, 2016."The Determinants and Welfare Implications of US Workers' Diverging Location Choices by Skill: 1980-2000,"American Economic Review, American Economic Association, vol. 106(3), pages 479-524, March.
    11. O. Ashenfelter & D. Card (ed.), 2011."Handbook of Labor Economics,"Handbook of Labor Economics,Elsevier,edition 1, volume 4, number 4.
    12. O. Ashenfelter & D. Card (ed.), 2011."Handbook of Labor Economics,"Handbook of Labor Economics,Elsevier,edition 1, volume 4, number 5.
    13. Gilles Duranton & J. V. Henderson & William C. Strange (ed.), 2015."Handbook of Regional and Urban Economics,"Handbook of Regional and Urban Economics,Elsevier,edition 1, volume 5, number 5.
    14. Michael Amior & Alan Manning, 2018."The Persistence of Local Joblessness,"American Economic Review, American Economic Association, vol. 108(7), pages 1942-1970, July.
    15. Glaeser, Edward L & Mare, David C, 2001."Cities and Skills,"Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 316-342, April.
    16. Colm Harmon & Hessel Oosterbeek & Ian Walker, 2003."The Returns to Education: Microeconomics,"Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 115-156, April.
    17. O. Ashenfelter & D. Card (ed.), 1999."Handbook of Labor Economics,"Handbook of Labor Economics,Elsevier,edition 1, volume 3, number 3.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by theCitEc Project, subscribe to itsRSS feed for this item.
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    Cited by:

    1. Peters, Jan Cornelius, "undated". "Quantifying the effect of labor market size on learning externalities,"Thünen Working Paper 262304, Johann Heinrich von Thünen-Institut (vTI), Federal Research Institute for Rural Areas, Forestry and Fisheries.
    2. Evert Meijers & Martijn Burger & Edward L. Glaeser & Giacomo A. M. Ponzetto & Yimei Zou, 2016."Urban networks: Connecting markets, people, and ideas,"Papers in Regional Science, Wiley Blackwell, vol. 95(1), pages 17-59, March.
    3. Benoît Schmutz & Modibo Sidibé, 2019."Frictional Labour Mobility,"The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(4), pages 1779-1826.
    4. Harald Oberhofer & Christian Glocker & Werner Hölzl & Peter Huber & Serguei Kaniovski & Klaus Nowotny & Michael Pfaffermayr & Monique Ebell & Nikolaos Kontogiannis, 2016."Single Market Transmission Mechanisms Before, During and After the 2008-09 Crisis. A Quantitative Assessment,"WIFO Studies,WIFO, number 59156, June.
    5. Francesco Berlingieri, 2019."Local labor market size and qualification mismatch,"Journal of Economic Geography, Oxford University Press, vol. 19(6), pages 1261-1286.
    6. repec:iab:iabdpa:201731 is not listed on IDEAS
    7. Bervoets, Sebastian & Zenou, Yves, 2017."Intergenerational correlation and social interactions in education,"European Economic Review, Elsevier, vol. 92(C), pages 13-30.
    8. Stef Proost & Jacques-François Thisse, 2019."What Can Be Learned from Spatial Economics?,"Journal of Economic Literature, American Economic Association, vol. 57(3), pages 575-643, September.
    9. Yimei Zou & Edward L. Glaeser & Giacomo A.M. Ponzetto, 2015. "Urban Networks: Spreading the Flow of Goods, People, and Ideas,"Working Papers 841, Barcelona School of Economics.

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    More about this item

    Keywords

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    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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