Internal migration and human capital theory: To what extent is it selective?

- There is substantial spread in pecuniary pay-offs from internal migration.
- Large gains are captured by the higher educated moving to major metropolitan areas.
- Income increases are however limited or even negative for a majority of migrants.
- This suggests human capital theory of internal migration is substantially selective.
- Matching and quantile regression promising method when modeling migrant outcomes.

Empirical studies of internal labor migration, modeling average outcomes, suggest migrants move to enhance returns to their labor. In contrast, major international surveys show less than a third of internal migrants as motivated by employment reasons. Using Swedish panel data for the years 2001-2009, this paper addresses this disconnect by examining the full distribution of migrant income changes. Results from initial CEM matching and quantile regression suggest that large returns to internal migration are mostly captured by the higher educated, those initially low in the income distribution and those heading into the largest metropolitan regions. Much if not most of migration outcomes are however a wash and indeed often negative in terms of pay-off. This suggests models of average outcomes as insufficient in addressing human capital motivated migration.