Migration Decisions and Site-Specific Attributes of Public Policy: Microeconomic Evidence from the NLSY

This paper demonstrates a relationship between migration and public policy and suggests a role for migration in regional development. Numerous studies have analyzed the relationship between migration and specific aspects of public policy, and simultaneous equations models have included public policy variables that are found to influence both firm location and migration. Yet, none of these studies has generated a comprehensive migration-oriented study of regional development that can be evaluated along with the firm location literature. Increasing evidence of the importance of public sector variables in the household location decision suggests further study of migration and regional development. Our empirical results contribute to the literature linking migration and public sector characteristics. We link migration to public policy by treating tax and expenditure variables as site attributes in a utility maximization model. We fmd that public sector attributes, through their effect on migration, are among the determinants of regional development.