Local Information, Income Segregation, and Geographic Mobility

We develop a model of migration in the face of geographic information asymmetries. Firms from a given city observe whether or not a local worker is a member of a disadvantaged local community, a negative indicator of productivity, but do not have this information for migrants to this city. With this knowledge, workers must decide whether to migrate and obscure information about their community of origin. Our model generates results consistent with recent trends in intergenerational mobility and internal migration as well as new predictions about the relationship between migrant outcomes and income segregation. We confirm these predictions using data from the U.S. census.