Mobility, Residential Location and Returns to Education

We are interested in distinguishing earnings and more specifically, returns to education, among workers based on where they were born (or, more ideally, where they received their K.-12 education), and where they currently reside. Our interest in examining this question is two-fold: areview of the voluminous literature on the returns to education suggests that studies, with a few exceptions, ignore geography in the determination educational returns or if considering education do not distinguish between the location of employment and the location where the education was obtained. Ignoring the possible distinction between place of work and place of education leads to an incomplete understanding of the returns to education, specifically how they might vary among regions. More concerning is that low estimated returns to education in an area might be interpreted as an indictment of the educational system in an area. However, with mobility it could well be the case that estimated returns are, in fact, inconsistently estimated. Low estimated returns to education in a region might be caused by sorting individuals with higher ability and therefore higher earnings but comparable education might leave regions with poor employment prospects meaning those with lower ability remain, thereby depressing the estimated return in the region more yet. Our other, related interest is to consider the interplay between migration and returns to education. How does mobility or, perhaps, more relevant for policy, immobility affect expected earnings. Do the earnings of students educated in depressed regions significantly vary depending on whether they remain in the region or not? Here, an obvious concern, is what determines mobility and to what extent is it correlated with (unobserved) factors affecting returns to education.