NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Jósef Sigurdsson

Institute for International Economic Studies
Stockholm University
SE-10691 Stockholm
Sweden
Sweden

E-Mail: josef.sigurdsson@iies.su.se

NBER Working Papers and Publications

July 2016The Gift of Moving: Intergenerational Consequences of a Mobility Shock
with Emi Nakamura, Jón Steinsson: w22392
We exploit a volcanic “experiment" to study the costs and benefits of geographic mobility. We show that moving costs (broadly defined) are very large and labor therefore does not flow to locations where it earns the highest returns. In our experiment, a third of the houses in a town were covered by lava. People living in these houses where much more likely to move away permanently. For those younger than 25 years old who were induced to move, the “lava shock” dramatically raised lifetime earnings and education. Yet, the benefits of moving were very unequally distributed within the family: Those older than 25 (the parents) were made slightly worse off by the shock. The large gains from moving for the young are surprising in light of the fact that the town affected by our volcanic experiment...
 
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