Skip to main content
SpringerLink
Log in

Migration and Human Capital: The Role of Education in Interregional Migration: The Australian Case

  • Chapter
  • First Online:
The Economic Geography of Cross-Border Migration

Part of the book series: Footprints of Regional Science ((VRS))

Abstract

This chapter seeks to distinguish between possible explanations for why internal migrants receive wage premiums or penalties post-migration. We use data from the Household Income and Labour Dynamics in Australia (HILDA), and individual fixed effects models to control for unobservable sorting of migrants. We decompose the return to migration into components attributable to a worker’s education versus their occupation, controlling for unobservable individual characteristics. Overall, we find that both education and occupations contribute a relatively equal amount to a worker’s return to interregional migration. When differentiated by the geography of origin and destination locations, we find that access to high-paying occupations and a higher return to education explain roughly equal shares of the return to migration for migrants who move from one major city to another. However, access occupations are the primary determinant of the wage premium received by migrants who move to remote/very remote regions in Australia.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 149.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 199.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 199.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    However, we note that consistent with observations in the United States, migration levels in Australia are falling in recent years (Bell et al. 2018).

  2. 2.

    This dataset is comparable to the Panel Study of Income Dynamics (PSID) and other surveys include in the Cross National Equivalence File (CNEF). For more information about the dataset used in our analysis please see: https://melbourneinstitute.unimelb.edu.au/hilda.

  3. 3.

    Prominent examples include the General Practice Rural Incentives Program (GRIP), which provides incentive payments of $4,500 to $60,000 per year for health professionals providing primary health care services in regional and remote regions of Australia. Payments are structured to incentivize migrants to regions that struggle to attract skilled workers, and provide further incentives to remain by providing higher incentives for continued tenure in the region. Australia has also instituted various policies to attract skilled foreign-born workers to regional Australia, and skilled foreign-born workers have become an important component of the regional workforce (Argent and Tonts 2015).

  4. 4.

    For more information about the HILDA dataset, please see Summerfield et al. (2011). And Wooden and Watson (2007).

  5. 5.

    The categories are Major city, Inner Regional, Outer Regional, and Remote/Very Remote.

  6. 6.

    We use fixed effects models rather than random effects models because we cannot assume that the unobserved individual heterogeneity is not correlated with explanatory variables. For example, unobserved ability is likely correlated with educational attainment.

  7. 7.

    In this chapter we only consider the first migration event in the case of multiple migration spells. According to this definition the migration indicator is only equal to 1 in the first post-migration spell, and the individual is dropped from the analysis when they are observed as a multiple migrant.

  8. 8.

    The top occupation for migrants from inner regional to remote/very remote Australia is: 25—Health professionals, which includes occupations such as Nurses, Medical Practitioners, Surgeons, and Pharmacists.

  9. 9.

    These values are calculated as the share of the contribution of education (1.22% points) and occupations (1.6% points) to the difference in the return to migration from the baseline to full specification in Table 11.4 (11.07%). All subsequent contributions of education and occupation to the return to migration are calculated similarly.

  10. 10.

    Note that though the estimates of the relative contributions of education and occupation are negative in the graph for inner regional to remote/very remote, this is because the return to migration increased from the baseline to the full specification, leading to a negative difference in estimates.

References

  • Argent, N., & Tonts, M. (2015). A multicultural and multifunctional countryside? International labour migration and Australia’s productivist heartlands. Population, Space and Place, 21(2), 140–156.

    Article  Google Scholar 

  • Bell, M., Charles-Edwards, E., Ueffing, P., Stillwell, J., Kupiszewski, M., & Kupiszewska, D. (2015). Internal migration and development: Comparing migration intensities around the world. Population and Development Review, 41(1), 33–58.

    Article  Google Scholar 

  • Bell, M., Charles-Edwards, E., Bernard, A., & Ueffing, P. (2018). Global trends in internal migration. Internal migration in the developed world: Are we becoming less mobile, 76–97.

    Google Scholar 

  • Bernard, A., Bell, M., & Charles-Edwards, E. (2016). Internal migration age patterns and the transition to adulthood: Australia and Great Britain compared. Journal of Population Research, 33(2), 123–146.

    Article  Google Scholar 

  • Bernard, A., Forder, P., Kendig, H., & Byles, J. (2017). Residential mobility in Australia and the United States: A retrospective study. Australian Population Studies, 1(1), 41–54.

    Article  Google Scholar 

  • Borjas, G. J., Bronars, S. G., & Trejo, S. J. (1992). Self-selection and internal migration in the United States. Journal of urban Economics, 32(2), 159–185.

    Article  Google Scholar 

  • Card, D., Cardoso, A. R., & Kline, P. (2015). Bargaining, sorting, and the gender wage gap: Quantifying the impact of firms on the relative pay of women. The Quarterly Journal of Economics, 131(2), 633–686.

    Article  Google Scholar 

  • Cardoso, A. R., Guimarães, P., & Portugal, P. (2016). What drives the gender wage gap? A look at the role of firm and job-title heterogeneity. Oxford Economic Papers, 68(2), 506–524.

    Article  Google Scholar 

  • Charles-Edwards, E., Bell, M., Cooper, J., & Bernard, A. (2018). Population shift: Understanding internal migration in Australia. In Census of population and housing: Reflecting Australia—Stories from the census, 2016.

    Google Scholar 

  • Corcoran, J., Faggian, A., & McCann, P. (2010). Human capital in remote and rural Australia: The role of graduate migration. Growth and Change, 41(2), 192–220.

    Article  Google Scholar 

  • Crown, D., Gheasi, M., & Faggian, A. (2020). Interregional mobility and the personality traits of migrants. Papers in Regional Science. https://doi.org/10.1111/pirs.12516.

  • Eriksson, R. H. (2011). Localized spillovers and knowledge flows: How does proximity influence the performance of plants? Economic Geography, 87(2), 127–152.

    Article  Google Scholar 

  • Etzo, I. (2011). The determinants of the recent interregional migration flows in Italy: A panel data analysis. Journal of Regional Science, 51(5), 948–966.

    Article  Google Scholar 

  • Faggian, A., McCann, P., & Sheppard, S. (2007). Some evidence that women are more mobile than men: Gender differences in UK graduate migration behavior. Journal of Regional Science, 47(3), 517–539.

    Article  Google Scholar 

  • Faggian, A., & McCann, P. (2008). Human capital, graduate migration and innovation in British regions. Cambridge Journal of Economics, 33(2), 317–333.

    Article  Google Scholar 

  • Faggian, A., Rajbhandari, I., & Dotzel, K. R. (2017). The interregional migration of human capital and its regional consequences: A review. Regional Studies, 51(1), 128–143.

    Article  Google Scholar 

  • Gelbach, J. B. (2016). When do covariates matter? And which ones, and how much? Journal of Labor Economics, 34(2), 509–543.

    Article  Google Scholar 

  • Glaeser, E. L., & Mare, D. C. (2001). Cities and skills. Journal of Labor Economics, 19(2), 316–342.

    Article  Google Scholar 

  • Greenwood, M. J. (1985). Human migration: Theory, models, and empirical studies. Journal of Regional Science, 25(4), 521–544.

    Article  Google Scholar 

  • Heckman, J. J. (1979). Sample selection bias as a specification error. Econometrica, 47(1), 153–161.

    Article  Google Scholar 

  • Hensen, M. M., De Vries, M. R., & Cörvers, F. (2009). The role of geographic mobility in reducing education-job mismatches in the Netherlands. Papers in Regional Science, 88(3), 667–682.

    Article  Google Scholar 

  • Iammarino, S., & Marinelli, E. (2015). Education-Job (mis) match and interregional migration: Italian university graduates’ transition to work. Regional Studies, 49(5), 866–882.

    Article  Google Scholar 

  • Kazakis, P., & Faggian, A. (2017). Mobility, education and labor market outcomes for US graduates: Is selectivity important? The Annals of Regional Science, 59(3), 731–758.

    Article  Google Scholar 

  • Kortt, M. A., Sinnewe, E., & Pervan, S. J. (2018). The gender wage gap in the tourism industry: Evidence from Australia. Tourism Analysis, 23(1), 137–149.

    Article  Google Scholar 

  • Mallik, G., Basu, P. K., Hicks, J., & Sappey, R. (2014). Do the determinants of employability and earnings returns produce similar outcomes in metropolitan and regional labour markets? The case of New South Wales, Australia. Regional Studies, 48(10), 1706–1718.

    Article  Google Scholar 

  • Marinelli, E. (2013). Sub-national graduate mobility and knowledge flows: An exploratory analysis of onward-and return-migrants in Italy. Regional Studies, 47(10), 1618–1633.

    Article  Google Scholar 

  • McCall, J. J. (1970). Economics of information and job search. The Quarterly Journal of Economics, 113–126.

    Google Scholar 

  • Moretti, E. (2004). Human capital externalities in cities. In Handbook of regional and urban economics (Vol. 4, pp. 2243–2291). Elsevier.

    Google Scholar 

  • Mortensen, D. T. (1970). Job search, the duration of unemployment, and the Phillips curve. The American Economic Review, 60(5), 847–862.

    Google Scholar 

  • Nakosteen, R. A., Westerlund, O., & Zimmer, M. (2008). Migration and self-selection: Measured earnings and latent characteristics. Journal of Regional Science, 48(4), 769–788.

    Article  Google Scholar 

  • OECD. (2016). Population and population changes in regions. In OECD regions at a glance 2016. Paris: OECD Publishing. https://doi.org/10.1787/reg_glance-2016-16-en.

  • Partridge, M. D., Rickman, D. S., Ali, K., & Olfert, M. R. (2008a). Lost in space: Population growth in the American hinterlands and small cities. Journal of Economic Geography, 8(6), 727–757.

    Article  Google Scholar 

  • Partridge, M. D., Rickman, D. S., Ali, K., & Olfert, M. R. (2008b). The geographic diversity of US nonmetropolitan growth dynamics: A geographically weighted regression approach. Land Economics, 84(2), 241–266.

    Article  Google Scholar 

  • Peri, G. (2002). Young workers, learning, and agglomerations. Journal of Urban Economics, 52(3), 582–607.

    Article  Google Scholar 

  • Roca, J. D. L., & Puga, D. (2017). Learning by working in big cities. The Review of Economic Studies, 84(1), 106–142.

    Article  Google Scholar 

  • Rowe, F., Corcoran, J., & Bell, M. (2017). The returns to migration and human capital accumulation pathways: Non-metropolitan youth in the school-to-work transition. The Annals of Regional Science, 59(3), 819–845.

    Article  Google Scholar 

  • Royuela, V., & Ordóñez, J. (2018). Internal migration in a developing country: A panel data analysis of ecuador (1982–2010). Papers in Regional Science, 97(2), 345–367.

    Article  Google Scholar 

  • Sander, N., & Bell, M. (2014). Migration and retirement in the life course: An event history approach. Journal of Population Research, 31(1), 1–27.

    Article  Google Scholar 

  • Scheffel, J., & Zhang, Y. (2018). How does internal migration affect the emotional health of elderly parents left-behind. Journal of Population Economics. https://doi.org/10.1007/s00148-018-0715-y.

    Article  Google Scholar 

  • Sjaastad, L. A. (1962). The costs and returns of human migration. Journal of political Economy, 70(5, Part 2), 80–93.

    Google Scholar 

  • Summerfield, M., Freidin, S., Hahn, M., Ittak, P., Li, N., Macalalad, N., & Wooden, M. (2011). HILDA user manual–release 10. Melbourne Institute of Applied Economic and Social Research, University of Melbourne.

    Google Scholar 

  • To, H., Grafton, R. Q., & Regan, S. (2017). Immigration and labour market outcomes in Australia: Findings from HILDA 2001–2014. Economic Analysis & Policy, 55, 1–13.

    Article  Google Scholar 

  • Venhorst, V. A., & Cörvers, F. (2018). Entry into working life: Internal migration and the job match quality of higher-educated graduates. Journal of Regional Science, 58(1), 116–140.

    Article  Google Scholar 

  • Vidal, S., Perales, F., Lersch, P. M., & Brandén, M. (2017). Family migration in a cross-national perspective: The importance of within-couple employment arrangements in Australia, Britain, Germany, and Sweden. Demographic Research, 36, 307–338.

    Article  Google Scholar 

  • Waldorf, B., & Do Yun, S. (2016). Labor migration and overeducation among young college graduates. Review of Regional Research, 36(2), 99–119.

    Article  Google Scholar 

  • Wen, L., & Maani, S. A. (2018). A panel study of immigrants’ overeducation and earnings in Australia. International Migration, 56(2), 177–200.

    Article  Google Scholar 

  • Wooden, M., & Watson, N. (2007). The HILDA survey and its contribution to economic and social research (so far). Economic Record, 83(261), 208–231.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. The Ohio State University, Columbus, OH, USA

    Daniel Crown

  2. The University of Queensland, Brisbane, Australia

    Jonathan Corcoran

  3. Gran Sasso Science Institute, L’Aquila, Italy

    Alessandra Faggian

Authors
  1. Daniel Crown
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Jonathan Corcoran
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Alessandra Faggian
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Daniel Crown .

Editor information

Editors and Affiliations

  1. Jheronimus Academy of Data Science, 'S-Hertogenbosch, Noord-Brabant, The Netherlands

    Karima Kourtit

  2. McMaster University, Hamilton, ON, Canada

    Bruce Newbold

  3. Jheronimus Academy of Data Science, 'S-Hertogenbosch, Noord-Brabant, The Netherlands

    Peter Nijkamp

  4. The Ohio State University, Columbus, OH, USA

    Mark Partridge

Appendix

Appendix

See Tables 11.5, 11.6, and 11.7.

Table 11.5 Transition matrix for interregional migrants across GCCSA regions
Full size table
Table 11.6 Gelbach decomposition (post-migration period limited to <5 years)
Full size table
Table 11.7 Gelbach decomposition (controlling for state fixed effects)
Full size table

Rights and permissions

Reprints and permissions

Copyright information

© 2021 The Author(s), under exclusive license to Springer Nature Switzerland AG

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Crown, D., Corcoran, J., Faggian, A. (2021). Migration and Human Capital: The Role of Education in Interregional Migration: The Australian Case. In: Kourtit, K., Newbold, B., Nijkamp, P., Partridge, M. (eds) The Economic Geography of Cross-Border Migration. Footprints of Regional Science(). Springer, Cham. https://doi.org/10.1007/978-3-030-48291-6_11

Download citation

Publish with us

Policies and ethics

Search

Navigation