Scandinavian Working Papers in Economics

Umeå Economic Studies,
Umeå University, Department of Economics

No 878: Regional Sorting of Human Capital – the Choice of Location among Young Adults in Sweden

Peter Berck (), Sofia Tano () and Olle Westerlund ()
Additional contact information
Peter Berck: Department of Agricultural and Resource Economics and Policy, Postal: University of California, Berkeley
Sofia Tano: Department of Economics, Umeå School of Business and Economics, Postal: Umeå University, S 901 87 Umeå, Sweden
Olle Westerlund: Department of Economics, Umeå School of Business and Economics, Postal: Umeå University, S 901 87 Umeå, Sweden

Abstract: Migration rates are highest among young adults, especially students, and their location choices affect the regional distribution of human capital, growth and local public sector budgets. Using Swedish register data on young adults, the choice of whether to enroll in education and the choice of location are estimated jointly. The results indicate a systematic selection into investment in further education based on school grades and associated preferences for locations with higher per capita tax bases. For students, the estimates indicate lower preferences for locations with higher shares of older people. The importance of family networks for the choice of location is confirmed.

Keywords: Agglomeration; human capital; local public sector; location choice

JEL-codes: J24; J61; R23

26 pages, February 26, 2014

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