TRADE: On Migration Gravity with Status Quo Bias and Job Search Friction; Professor Nancy Chau (Cornell University)

Abstract

This paper presents and estimates a search-theoretic model of mobility in a multiregional setting with status quo bias in locational preferences. The solution features a revised closed-form migration gravity equation and new structural interpretation to gravity estimates adjusted to accommodate involuntary unemployment. Using a collection of search friction proxies, we empirically test the model, and back out status quo bias estimates for US counties. We find that status quo bias estimates are spatially dispersed, and embody a wealth of non-wage individual and community profile cues, such as political orientation, religiosity and climate, that are correlated with the tendency to stay put.

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