The Cost of Migrating to a Culturally Different Location
CESifo, Munich, 2014
CESifo Working Paper No. 4992
![](https://cesifo.org/DocImg/cesifo1_wp4992.jpg?c=1689237115)
Ever since Sjaastad (1962), researchers have struggled to quantify the psychic cost of migration. We monetize psychic cost as the wage premium for moving to a culturally different location. We combine administrative social security panel data with a proxy for cultural difference based on historical dialect dissimilarity between German counties. Conditional on geographic distance and pre-migration wage profiles, we find that migrants demand a (indexed with respect to local rents) wage premium of about 1 (1.5) percent for overcoming one standard deviation in cultural dissimilarity. The effect is driven by males, more pronounced for geographically short moves, and persistent over time.
Labour Markets