This is the first in this year’s series of posts by PhD students on the job market.
A central puzzle in economics is how massive income disparities over space can persist. If the gains from migrating are so large, why do people stay in places with fewer opportunities? Economists often infer that there must be costs that prevent them from leaving. Some of these costs, such as the monetary cost of transport, can be observed and counted. But estimates of these costs are usually not high enough to explain why people don’t move, suggesting other costs may matter more.
Other costs—feeling unsafe, lonely or unhappy away from home—can be harder to observe and quantify. As a result, we know less about their importance in shaping migration decisions, and whether people anticipate them accurately. This matters for policy design: if people stay put because of excessive fears of what they will experience if they migrate, then information could help alleviate these fears, and a contact who has already moved may be the best person to provide it. But if their beliefs about the costs of migration reflect true conditions at the destinations, policy that aims to encourage migration may instead need to make life away from home safer and easier.
To understand the expected costs of migration, and whether expectations change through contact with a migrant peer, in my job market paper I ran two experiments with 1,682 high-school students in two districts of Maharashtra, India, together home to more than seven million people. I followed them through their final year of school as they made their first major migration decision, and one of the most consequential of their lives: where to attend college.
My first experiment, a choice experiment, reveals that migration costs are large, rise sharply with distance, and are tied to students’ expectations about safety, happiness and loneliness away from home. My second experiment evaluates a mentoring program that connects high-school students with college students who had left home to study, showing that such a contact can raise applications to colleges elsewhere in students’ own district from 18 to 23 percent, but not to the major education hubs farther away, where mentors study.
What does educational migration offer?
Students in my study come from 52 schools, which are broadly similar to public schools in the two districts. They are preparing to apply to college, and interested in learning more about their options. Many can continue studying at home, but looking further away, beyond their district can expand the number of programs they could typically qualify for by tenfold. Many of the most selective programs are in the state’s major education hubs, such as Pune and Mumbai, which also offer better-paid jobs.
Students understand the potential returns to migration. More than half expect studying away to lead to jobs paying higher salaries after graduation, even after accounting for living costs. Yet the majority still prefer to study near home, even among those who expect to earn more elsewhere. This points to migration costs high enough to outweigh those gains.
Experiment one: how large are migration costs?
The magnitude of the salary gains that students would be willing to give up to avoid migration reveals the value of the perceived costs of migration in monetary terms. The first experiment therefore presents students with pairs of hypothetical colleges and asks which they would choose if admitted to both. The colleges’ locations and their graduates’ expected earnings vary experimentally, and tuition and living expenses stay fixed within the student’s budget. Since the survey also served as the application to the mentoring program, and responses were used to match students with mentors, students had an incentive to answer truthfully.
On average, students are indifferent between colleges at home and away only if migrating more than doubles their expected salary, with women requiring about three times as much as men. The required increase rises with distance: students see moving to a nearby city within their district and moving to major educational hubs several hours away as substantially different choices (Figure 1).
