Stephen M. Renas

The cost of living, labor market opportunities, and the migration decision: a case of misspecification?

A large literature has emerged dealing with the economic and non-economic determinants of migration. Among the economic determinants of migration are income levels and rates of change in income in different areas. These variables are designed to measure labor market opportunities both currently and in the future. Invariably, studies which attempt to explain migration utilizenominal measures of income and change in income, notreal measures. Yet assuming that individuals are not subject to money illusion, they would be interested in cost of living information as well as in information regarding nominal income and change in income. This paper examines this issue empirically. We demonstrate that some cost of living variables, when included in a migration equation, enter with the expected sign and are statistically significant. We also demonstrate the failure to include such variables in a regression results in misspecification and bias involving some of the variables in the regression.

Climatic conditions and migration: an econometric inquiry.

Among a burgeoning literature dealing with the economic and noneconomic determinants of migration, one area that has received relatively little attention is the relationship between climate and migration. In the few studies which include climate variables in models used to explain migration, the treatment accorded to climate as an explanatory variable has not been satisfactory. This paper attempts to fill this void. Our paper first critically reviews the treatment of climate in the migration literature and then proposes alternative ways of dealing with it which represent improvements from both a theoretical and an empirical point of view. Our regression results suggest that individuals do indeed consider climatic conditions in different areas when deciding where to live. Our results also indicate that the climate variables which yield the best results are generally those which have not been used in the literature.