balancing skilled with unskilled migration in an urbanizing agricultural economy summary in the early stages of economic development the migration of unskilled workers contributes to labor intensive manufacturing production in middle income countries however the migration of skilled workers becomes the more important factor in economic progress evaluating the skill content of migration patterns therefore is essential to understanding migration s economic implications for this purpose we investigate the determinants of skilled and unskilled migration decisions in vietnam rural higher education is shown to promote knowledge intensive production by encouraging skilled individuals to migrate to cities in complementary fashion commercial farm development helps alleviate urban overcrowding by encouraging unskilled individuals to remain at home

geographical mobility and potential wage gain of immigrants within spain ruiz a c geographical mobility and potential wage gain of immigrants within spain regional studies geographical mobility of workers within countries can be a means of equilibrating regional economic disparities within this context a relevant topic is the mobility of foreign workers in the destination country the spanish case is interesting because spain has one of europe s fastest growing immigration rates this paper is aimed first at studying the determinants of interregional geographical mobility of immigrants in spain and second at obtaining consistent estimates of an individual s opportunity wage as a mover or a stayer findings show that an expected wage gain exerts a positive influence on mobility and leads to a better allocation of resources

north american migration returns to skill border effects and mobility costs utilizing a utility maximizing roy type discrete choice model of worker location in canadian provinces and u s states that incorporates returns to skill amenities fixed costs distance langua

how important is selection experimental vs non experimental measures of the income gains from migration measuring the gain in income from migration is complicated by non random selection of migrants from the general population making it difficult to obtain an appropriate comparison group of non migrants this paper uses a migrant lottery to overcome this problem providing an experimental measure of the income gains from migration new zealand allows a quota of tongans to immigrate each year with a lottery to choose among the excess number of applicants a unique survey conducted by the authors in these two countries allows experimental estimates of the income gains from migration by comparing the incomes of migrants to those who applied to migrate but whose names were not drawn in the lottery after allowing for the effect of non compliance among some of those whose names were drawn the authors also conducted a survey of individuals who did not apply for the lottery comparing this non applicant group with the migrants enables assessment of the degree to which non experimental methods can provide an unbiased estimate of the income gains from migration they find evidence of migrants being positively selected in terms of both observed and unobserved skills as a result non experimental methods are found to overstate the gains from migration by 9 to 82 percent a good instrumental variable works best while difference in differences and bias adjusted propensity score matching also perform comparatively well

the visible and the hidden behind migrants human capital abstractthe paper explores differences in human capital between the israel born and immigrants within the jorgenson and fraumeni model using a unique imputed education method the study answers

job loss and regional mobility we study the migration behavior of displaced workers and find that job displacement increases regional mobility we find however that noneconomic factors such as family ties are very important

comparative advantage learning and sectoral wage determination we develop a model in which a worker s skills determine the worker s current wage and sector the market and the worker are initially uncertain about some of the worker s skills endogenous wage changes and sector mobility occur as labor market participants learn about these unobserved skills we show how the model can be estimated using nonlinear instrumental variables techniques we apply our methodology to study wages and allocation of workers across occupations and industries using individual level panel data from the national longitudinal survey of youth we find that high wage sectors employ high skill workers and offer high returns to workers skills

migration theories and evidence an assessment abstract this paper presents a critical survey of theories of migration their welfare and policy implications and their empirical relevance we also develop some extensions to the theory beginning with the harris and todaro ht model in particular the ht model is extended to examine risk averse behaviour within families where the migration of members of families serves to diversify risk the welfare implications of the individual migration decision and government intervention in the form of employment subsidies are examined recent evidence on international migration is presented it is shown that migration does not flow automatically in response to wage differentials characteristics of migrants and the process of self selection are found to be important determinants of the rate of migration

staunching emigration from east germany age and the determinants of migration following the unification of germany in 1990 eastern wages and unemployment both rose rapidly i demonstrate that rising wages reduced eastern emigration greatly while rising unemployment had little effect this reflects the behavior of the young who are very sensitive to source region wages and relatively insensitive to source unemployment i show that most of the effect of source unemployment comes from the contemporaneous effect on those laid off who are more likely to be older i find that compared to stayers young emigrants are much more skilled older emigrants are slightly more skilled and commuters are not more skilled as measured by education and pre move wages my conclusions are based on a comparison of results from aggregate inter state migration data and individual data from the eastern sample of the german socio economic panel for 1990 2000 jel j61 p23

a theory of brain drain and public funding for higher education in the united states support for higher education has been decreasing in the united states from 1980 to 2005 real state appropriations for higher education per student have decreased an average of 20 percent with only 6 states increasing funding one reason cited for decreased university funding has been the mobility of college graduates ronald a wirtz 2003 in fact the college educated often leave the state that subsidized their education yolanda k kodrzycki 2001 found that 37 percent of people with a bachelor s degree changed their state of residence between 1979 and 1996 compared to 19 percent of those with a high school education or less although state policymakers are concerned about outmigration empirical studies present contrasting evidence regarding the relationship between outmigration and university funding james g strathman 1994 polgreen 2008 thus a structured model is needed to clarify this relationship to our knowledge we are the first to develop such a theory building upon a theory of international brain drain developed by kaz miyagiwa 1991 we develop a model that includes heterogeneity in ability among college graduates and emphasizes the role of economies of scale in the returns to higher education we depart from miyagiwa s paper in several important ways 1 we study domestic brain drain within the united states but brain drain across state boundaries differs from international brain drain we define brain drain as the net emigration of college graduates skilled personnel from the state where they got their college degree to another state 2 we account for different degrees of returns to scale a theory of brain drain and public funding for higher education in the united states

big locational unemployment differences despite high labor mobility considerable labor mobility exists across us states enough that if migration arbitrages local unemployment one might expect very low unemployment differences across states however cross state data reveal large unemployment differences an equilibrium multi location model with stochastic worker location match productivity and within location trading frictions can account for these facts in the model some workers move to or stay in a location with high unemployment because they are more productive there than elsewhere according to the model labor mobility and aggregate unemployment are negatively related this prediction is in stark contrast to standard sectoral reallocation theory but consistent with the us data

regional disadvantage employee non compete agreements and brain drain abstract a growing body of research has documented the local impact of employee non compete agreements but their effect on interstate migration patterns remains unexplored exploiting an inadvertent policy reversal in michigan as a natural experiment we show that non compete agreements are responsible for a brain drain of knowledge workers out of states that enforce such contracts to states where they are not enforceable importantly this effect is felt most strongly on the margin of workers who are more collaborative and whose work is more impactful

government policies market imperfections and foreign direct investment the internalization eclectic theory of foreign direct investment includes the important insight that government policies create market imperfections which make foreign direct investment an economically rational strategic alternative for firms this paper reexamines the effects of government policies on market imperfections and foreign direct investment fdi it broadens and refines the analysis of the impact of government policies by developing the following arguments 1 there is a wide range of government policies that affect firms fdi decisions via their effects on market imperfections 2 there are numerous dimensions of variability in government policies that need to be identified in order to understand fully the effects of government policies on market imperfections and hence fdi flows 3 some of the effects of government policies on market imperfections and fdi are the opposite of those previously noted in the fdi literature 4 the effects of government policies vary across the several individual components of fdi flows the paper thus examines the following variables and relationships more extensively and precisely than has the previous literature government policy variables as causal factors affecting fdi market imperfection variables as intervening factors in the causal connections between government policies and fdi and the multiple indicators of the various dimensions of fdi as dependent variables

the selection of high skilled emigrants we measure selection among high skilled emigrants from germany using predicted earnings migrants to less equal countries are positively selected relative to nonmigrants while migrants to more equal countries are negatively selected consistent with the prediction in borjas 1987 positive selection to less equal countries reflects university quality and grades and negative selection to more equal countries reflects university subject and gender migrants to the united states are highly positively selected and concentrated in stem fields our results highlight the relevance of the borjas model for high skilled individuals when credit constraints and other migration barriers are unlikely to be binding

a closer look at the determinants of international migration decomposing cultural distance abstractusing a modified gravity model and three measures of cultural distance we employ the zero inflated negative binomial estimation technique to examine the impact of cultural distance on international migration flows we confirm the finding of prior studies that there exists a negative relationship between composite measures of cultural distance and immigrant flows extending the literature we decompose our composite cultural distance measures into their component dimensions to examine potential variability in the influences of individual dimensions on international migration we find the cultural dimensions that reflect individualism uncertainty avoidance and perceived gender roles are typically more influential in determining immigrant flows than are other cultural dimensions

growth and change in human capital across the canadian urban hierarchy 1996 2001 university degree holders in large cities are more prevalent and are growing at a more rapid pace than in smaller cities and rural areas this relatively high rate of growth stems from net migrator

the pursuit of opportunity explaining selective black migration abstract this paper examines the destination choices of black migrants during the great migration as previous research has shown educated blacks were more likely to relocate to the north in the pre world war ii era this analysis shows that this tendency can be attributed to the better educated migrants ability to finance transportation costs greater responsiveness to intercity wage differentials and stronger distaste for southern disamenities after 1940 the destination choice gap closed largely because migrant responses to wage differentials and valuation of southern disamenities changed these changes are observed both in the population at large and within birth year cohorts

non existence of equilibria in multicommunity models abstract this paper reconsiders equilibrium existence in models with migration and voting over local public goods we show that under some straightforward assumptions on preferences and income distributions the basic structure of multicommunity models i e perfect mobility majority rule single crossing property implies that no equilibrium with jurisdictions conducting different policies can exist stratification equilibria with sorting of the population according to income classes are therefore not as natural as is sometimes suggested mechanisms that can serve to support stratification i e tight housing markets returns to scale in the provision of publicly consumed goods are discussed

new estimates of climate demand evidence from location choice abstract we develop and apply to census data a new method for estimating climate demand the method is useful for ranking quality of life based upon a willingness to pay criterion our two major findings are that the willingness to pay quality of life index is correlated with the hedonic approach s ranking but that the migration approach generates much larger estimates of willingness to pay for a more moderate climate this finding is relevant for evaluating the economic impact of global warming

international migration self selection and the distribution of wages evidence from mexico and the united states we use the 1990 and 2000 mexican and u s population censuses to test borjas s negative selection hypothesis that the less skilled are those most likely to migrate from countries with high skill premia earnings inequality to countries with low skill premia earnings inequality we find that mexican immigrants in the united states are more educated than nonmigrants in mexico and were mexican immigrants to be paid according to current skill prices in mexico they would be concentrated in the middle of mexico s wage distribution these results are inconsistent with the negative selection hypothesis and instead suggest that there is intermediate selection of immigrants from mexico

using spatial econometrics to analyze local growth in sweden lundberg j 2006 using spatial econometrics to analyse local growth in sweden regional studies 40 303 316 the paper investigates factors that determine the average income growth and net migration rates in swedish municipalities during 1981 99 the main issue is to test the hypothesis that conditional on a set of other possible determinants of regional growth the growth rate in one municipality is affected by the growth rates in its neighbouring municipalities the hypothesis of conditional convergence is also tested a positive correlation is found between net migration rates in neighbouring municipalities which suggests that net migration tends to spillover to neighbouring municipalities when it comes to average income growth the results indicate spatial dependence in the error terms during the 1980s however there is no clear evidence in favour of the hypothesis of conditional convergence instead the results predict conditional divergence between municipalities located in the stockholm reg

low and high skill migration flows free mobility versus other determinants we investigate what economic factors drive international migration of workers to france and how their influence varies across different skill levels under restrictive policies and through time as free mobility is implemented we find that neither incentives nor policy parameters are similar across skill levels migration drivers such as a network of compatriots and relative incomes influence the movement of low skill workers high skill individuals however move only according to financial opportunities be they standard of living or returns to skill within a class we conclude that competition for high skill workers among organization for economic co operation and development oecd countries requires more than free mobility to successfully attract high skill migrants even for a developed country such as france

mobility and the return to education testing a roy model with multiple markets self selected migration presents one potential explanation for why observed returns to a college education in local labor markets vary widely even though u s workers are highly mobile to assess the impact of self selection on estimated returns this paper first develops a roy model of mobility and earnings where workers choose in which of the 50 states plus the district of columbia to live and work available estimation methods are either infeasible for a selection model with so many alternatives or place potentially severe restrictions on earnings and the selection process this paper develops an alternative econometric methodology that combines lee s 1983 parametric maximum order statistic approach to reduce the dimensionality of the error terms with more recent work on semiparametric estimation of selection models e g ahn and powell 1993 the resulting semiparametric correction is easy to implement and can be adapted to a variety of other polychotomous choice problems the empirical work which uses 1990 u s census data confirms the role of comparative advantage in mobility decisions the results suggest that self selection of higher educated individuals to states with higher returns to education generally leads to upward biases in ols estimates of the returns to education in state specific labor markets while the estimated returns to a college education are significantly biased correcting for the bias does not narrow the range of returns across states consistent with the finding that the corrected return to a college education differs across the u s the relative state to state migration flows of college versus high school educated individuals respond strongly to differences in the return to education and amenities across states

spatial lock in do falling house prices constrain residential mobility abstract falling house prices have caused numerous homeowners to suffer capital losses those with little home equity may be prevented from moving because of imperfections in housing finance markets the proceeds from the sale of their home may be insufficient to repay their mortgage and provide a down payment on a new home a data set of mortgages is used to examine the magnitude of these constraints estimates show that average mobility would have been 24 higher after 3 years had house prices not declined and after 4 years it would have been 33 higher among those with high initial loan to value ratios the differences are even greater

income maximization and the selection and sorting of international migrants abstract two prominent features of international labor movements are that the more educated are more likely to emigrate positive selection and more educated migrants are more likely to settle in destination countries with high rewards to skill positive sorting using data on emigrant stocks by schooling level and source country in oecd destinations we find that a simple model of income maximization can account for both phenomena results on selection show that migrants for a source destination pair are more educated relative to non migrants the larger is the absolute skill related difference in earnings between the destination country and the source results on sorting indicate that the relative stock of more educated migrants in a destination is increasing in the absolute earnings difference between high and low skilled workers we use our framework to compare alternative specifications of international migration estimate the magnitude of migration costs by source destination pair and assess the contribution of wage differences to how migrants sort themselves across destination countries

self selection and the earnings of immigrants this paper analyzes the way in which the earnings of the immigrant population may be expected to differ from the earnings of the native population because of the endogeneity of the decision to migrate the empirical study shows that differences in the u s earnings of immigrants with the same measured skills but from different home countries are attributable to variations in political and economic conditions in the countries of origin at the time of migration excerpt

testing the expectations hypothesis in eurodeposits abstract analyzing data on euro rates for 1978 1998 we find some consistent evidence in favor of the expectations hypothesis eh of the term structure a interest rates offered on deposits in a given currency form a cointegrated system b the restrictions of the eh on the cointegrating relationships are not rejected c forward rates contain significant explanatory power on future interest rates unbiasedness being an acceptable hypothesis as a cointegrating relationship between forward rates and the appropriate future value of the corresponding short term interest rate however we also provide evidence that past rates contain information additional to that in forward rates to predict future short term rates against the rational expectations version of the eh and market efficiency

wages rents and amenities differences among workers and regions what explains persistent regional earnings differences this paper argues that regional differences in amenities can account for the wage differences in contrast cost of living variations do not account for wage differences but actually exacerbate them this conclusion results from a model in which variations in rents and wages are equalizing differences for amenity differences empirical results are consistent with the model

does high inequality attract high skilled immigrants this study examines how the sources and levels of income inequality affect how a country attracts and retains high skilled workers with parameter values that yield realistic levels of emigration our model shows that emigration rates increase with education when the returns to education are higher abroad however the relationship between unobservable skills residual wages and emigration can display an inverse u shaped pattern if unobservable skills are composed of both general and country specific skills using data on israeli emigrants before they decide to emigrate we find strong empirical evidence in support of the model s predictions

why do cities pay more an empirical examination of some competing theories of the urban wage premium abstract ols regression identifies a 19 percent wage advantage for workers in large urban areas fixed effects estimation suggests that two thirds of this premium can be explained by cities attracting workers of higher unmeasured skills and ability the remaining wage premium is shown to consist of both level and growth elements the wage level effect is consistent with a productivity advantage for firms located in cities the wage growth effect is shown to relate in part to a cumulative advantage in the returns to job mobility for urban workers this last finding highlights the importance of coordination in urban labor markets

natural resource abundance and healthcare efficiency in appalachia a robust conditional approach abstract this study investigates the role of natural resource abundance on healthcare efficiency in appalachia unconditional efficiency measures are calculated from a production process where health inputs are turned into health outcomes we utilize a non parametric robust order m estimator where we condition our efficiency measures on secondary environmental variables that do not directly impact health in a production process unlike the unconditional estimation procedure which impacts the shape of the production frontier as well as the distance to the frontier the secondary environmental variables alter the location of the production frontier with corresponding effects on efficiency we find that taking into account the relatively worse socioeconomic and healthcare conditions in appalachia improves healthcare efficiency by 1 6 and 1 9 percentage points respectively the presence of natural resource extraction measured by oil natural gas or coal production worsens healthcare efficiency by 0 14 percentage points another vehicle of the resource curse regressing the conditional efficiency estimates on secondary environmental variables shows that counties with natural resource production are further from the production frontier and therefore more inefficient findings suggest that policymakers can improve health efficiency by incentivizing positive health behaviors such as reduced obesity and smoking rates which would mimic health improving inputs in a production process

understanding gross worker flows across u s states abstract the main cross sectional and time series properties of state level gross and net worker flows wages and rents are characterized using micro data from the u s census a dynamic general equilibrium model of worker migration is introduced to explain the stylized facts in the model a location may experience simultaneous inflows and outflows of workers recent migrants choose to migrate more often than incumbent workers thus locations that attract high numbers of migrants also tend to experience high outflow rates this pattern is a robust feature of the data and cannot be explained by models of net flows only

the effect of redistribution on migration evidence from the israeli kibbutz this paper tests a key theoretical prediction of public finance that local redistribution induces sorting of the population so that less productive individuals are located in communities with more redistribution specifically i use a longitudinal data set to test whether and to what extent the intensive redistribution practiced by israeli kibbutzim encourages exit of more productive individuals and entry of less productive ones the findings support the theoretical prediction kibbutz leavers are more skilled than both stayers and other rural migrants and they earn higher wages upon exit than observably similar city natives and other migrants in contrast individuals who earn lower wages in the city are more likely to enter a kibbutz but they are not more likely to move to other rural areas these findings also support borjas hypothesis that migrants self selection depends on the difference in returns to skills between the origin and the destination

the volatility effect of diaspora s location remittances can transmit volatility from host to home countries for some common patterns of diaspora s geographical distribution in a migration portfolio model the overall risk of volatility of any set of diaspora location is decomposed into a contagion and a concentration risks a diaspora located in more volatile destinations induces a higher contagion risk while a diaspora located in few destination countries increases the concentration risk a series of estimations on a large panel of developing countries over 1995 2015 provide evidence for these two risks estimation of a structural model confirms that the geography of diaspora has an indirect impact on the origin country s aggregate instability through remittances

career migration self selection and the earnings of married men and women in the netherlands 1981 93 the relationship between career migration and earnings is studied for married men and women in the netherlands the hourly wages of married men and women who made a recent long distance move are found to be higher than those of married men and women who did not move or who moved only over a small distance this earning difference between migrants and non migrants seems to be due completely to the fact that the migrants are a favorable self selected group both with regard to their measured characteristics and with regard to their unmeasured characteristics if this favorable self selection is taken into account the male and female migrants turn out to earn significantly less than their non migrating counterparts for the males this finding suggests that before the move they were in relatively unfavorable labor market situations compared with the non migrants with the same measured and unmeasured characteristics for the females the negative effect of migration merely indicates that most long distance moves are still made for the career of their husband authors

self selection and internal migration in the united states abstract within the conceptual framework of the roy model this paper provides an empirical analysis of internal migration flows using data from the national longitudinal survey of youth the theoretical approach highlights regional differences in the returns to skills regions that pay higher returns to skills attract more skilled workers than regions that pay lower returns our empirical results suggest that interstate differences in the returns to skills are a major determinant of both the size and skill composition of internal migration flows persons whose skills are most mismatched with the reward structure offered by their current state of residence are the persons most likely to leave that state and these persons tend to relocate in states which offer higher rewards for their particular skills

education mobility and the college wage premium abstract motivated by large educational differences in geographic mobility this paper considers a simple dynamic extension of roy s 1951 model and analyzes it using new evidence on net versus excess mobility and the individual level relationship between mobility and wages according to the model the dispersion of a labor income shock specific to a worker location match is greater for more educated workers and accounts for large educational differences in mobility in the model labor mobility raises both the average wage and the college wage premium a prediction consistent with differences between europe and the u s

migration and household adaptation to climate a review of empirical research abstract this paper reviews empirical research on migration and land use impacts associated with climate change household migration arises due to changes in economic opportunities and climate amenities resulting from climate change throughout the paper efforts are made to highlight key empirical findings as well as areas in need of additional research the existing literature is discussed through the lens of reduced form and structural approaches paying particular attention to preference heterogeneity and the often complex interconnections between economic sectors in determining household migration areas in need of additional research include improving our understanding of the coupling between human and natural systems accounting for endogenous attributes and payoffs and incorporating richer characterizations of the tradeoffs driving migration across multiple economic sectors

on the mechanics of migration decisions skill complementarities and endogenous price differentials abstract why are highly skilled workers more responsive than other workers to productivity differentials when taking migration decisions why do low skilled workers abandon rich regions this paper aims to answer these questions using skill complementarities and endogenous price differentials between rich and poor regions if the skill premium is increasing in the average level of human capital of a location the more skilled the workers are the stronger the economic incentives to migrate to the rich regions become in contrast the low skilled workers have an incentive to migrate to the poor regions to minimize their living costs

selection in initial and return migration evidence from moves across spanish cities this paper investigates the sorting of more productive workers into denser cities using administrative data for spain that fol low individuals continuously throughout their working lives migrants who move to denser cities are positively selected in terms of educa tion occupational skills and individual productivity as proxied by pre migration position in the local earnings distribution however not everyone is able to benefit equally from denser cities and this leads to a second round of sorting returnees are not only ex ante less productive than permanent migrants but are also those who following the first move have least boosted up their earnings in denser cities

immigration and welfare magnets this article investigates if the location choices made by immigrants when they arrive in the united states are influenced by the interstate dispersion in welfare benefits income maximizing behavior implies that foreign born welfare recipients unlike their native born counterparts may be clustered in the states that offer the highest benefits the empirical analysis indicates that immigrant welfare recipients are indeed more heavily clustered in high benefit states than the immigrants who do not receive welfare or than natives as a result the welfare participation rate of immigrants is much more sensitive to changes in welfare benefits than that of natives

the political geography of tax h e avens and tax hells worldwide many governments rely on personal income taxation as one of their major sources of tax revenue casual empirical evidence suggests that although most developed countries levy substantial taxes particularly on higher incomes there also exist a few countries that are characterized by no or very low income taxation a distinguishing feature of the countries in the latter group is that they are geographically very small as can be seen from table 1 which presents international income tax policies and geographical dimensions of some selected countries in the present paper we investigate whether the geography of a country is related to its pattern of taxation central to our argument is the ongoing international integration in the last decades in some cases e g in the european union the process has advanced to the point at which all formal constraints to mobility have been abandoned this development has also greatly improved the mobility of households across states or national borders in contrast to the mobility of production factors however the effects of household mobility migration are not confined to budgetary consequences as taxpayers immigrate or emigrate the inand outflow of citizens also alters policy objectives by changing the composition of the electorate in a jurisdiction at the same time migration decisions especially those of wealthy individuals are based on local tax policies consequently the migration of households determines fiscal policies through the interplay of two basic effects 1 residential choices determine tax rates through a process in which a jurisdiction s inhabitants select their local policies and 2 tax and welfare policies in each jurisdiction influence residential decisions as we argue in this paper this interdependency of residential and political decisions may provide an explanation for the stylized facts illustrated in table 1 we consider a simple framework in which households differ in incomes and national tax policies are democratically determined as a natural implication of their earning characteristics high income households ceteris paribus prefer to live in countries with low taxation for ease of exposition we refer to those countries as tax h e avens in a slight perturbation of popular nomenclature low income households in contrast are more interested in generous public spending than in low income tax rates ceteris paribus they prefer to reside in countries with large welfare programs financed by substantial taxation which we call tax hells for obvious reasons thus individual preferences imply a self selection process which leads to the segregation of households across countries according to income classes 1 if this segregation is in turn supported by a national vote for low taxes in countries where high income earners live and high taxes in countries where lower income earners live an equilibrium with tax heavens populated by wealthy residents and tax hells populated by the less affluent evolves yet the geographical size of countries plays a crucial role in this development first it affects the number of a country s inhabitants the population size because households sort hansen apax partners company possartstr 11 81679 miinchen germany kessler department of economics university of bonn adenauerallee 24 42 53113 bonn germany kessler wipol uni bonn de we thank two anonymous referees marcus berliant dennis epple christian ewerhart gerhard glomm david pines urs schweizer and participants in presentations at the university of munich the 1997 site meeting stanford the 1997 american econometric society summer meeting pasadena and the 1996 iipf congress tel aviv for helpful suggestions and discussions both authors gratefully acknowledge financial support by the deutsche forschungsgemeinschaft sfb 303 at the university of bonn remaining errors are our own the views expressed in this paper should not be attributed to apax partners company 1 the sorting of individuals by preferences across jurisdictions goes back to the famous contribution of charles m tiebout 1956 on migration as a means to reveal preferences over public goods