Employment Opportunities,Wages and International Migration in Sweden 1970–1989

In this study I focus on the impact of aggregate labor turnover and regional labor market conditions on gross in- and out-migration within the framework of a neoclassical flexible-wage (equilibrium) model and a fixed-wage (labor-market disequilibrium) model. Using annual panel data on internal gross migration flows in Sweden from 1970 to 1989, I find that regional differences in employment opportunities have the expected effects on migration. The empirical relationship between real wages and gross migration flows is found to be less congruent with theory implications, indicating that compensated regional income prospects are equalized primarily via the interaction between employment opportunities and gross migration flows. Cyclical changes in hirings are shown to have a robust and strongly significant positive scale effect on migration.     

THE IMPACT OF SKILL‐SPECIFIC MIGRATION ON REGIONAL UNEMPLOYMENT DISPARITIES IN GERMANY

Differences in regional unemployment are still pronounced in Germany, especially between eastern and western Germany. Although the skill level seems important for the relationship between regional disparities and labor migration, corresponding empirical evidence is scarce. Applying dynamic panel models, we investigate the impact of labor mobility differentiated by educational attainment of the workers on regional unemployment disparities between 2000 and 2008. The impact of low‐ and medium‐skilled migration is consistent with traditional neoclassical reasoning, suggesting that labor mobility reduces differences in regional unemployment rates. In contrast, the migration of high‐skilled workers tends to reinforce disparities.     

URBAN UNEMPLOYMENT AND THE SPATIAL STRUCTURE OF LABOR MARKETS: AN EXAMINATION OF THE “TODARO PARADOX” IN A SPATIAL CONTEXT*

ABSTRACT The Todaro paradox and the effects of job creation in urban areas will be re-examined in our spatial model in which the radius of the labor market is endogenously determined by the rational choices of workers. The travel cost of workers plays a crucial role in the choice between two different types of response, migration or commuting. By considering travel costs, we find that the Todaro paradox can be applied to developed, as well as developing, countries. Job creation in urban areas can produce a paradoxical increase in urban unemployment in developed countries, because the low marginal cost of travel will significantly increase the radius of the urban labor market and create new labor supply without migration.     

STRUCTURAL CHANGES IN LABOR DEMAND AND UNEMPLOYMENT IN LOCAL LABOR MARKETS*

ABSTRACT. It seems quite clear that the US. economy in the late 1970s and early 1980s was exposed to an accelerated rate of structural change resulting from energy price shocks, increased international competition and technological change. It is of considerable interest, then, that previous attempts to examine structural unemployment in this period find that structural shift in employment generally were not Significant determinants of the unemployment rate. This paper revisits this issue using a measure of structural job shifts drawn from the literature on establishment job creation and destruction. The results show that changes in the structure of labor demand across industry by establishment-size sectors had a statically significant and empirically important positive effect on the unemployment rate in a sample of 200 metropolitan labor markets during the 1976 to 1984 period.     

THE DETERMINANTS OF THE RECENT INTERREGIONAL MIGRATION FLOWS IN ITALY: A PANEL DATA ANALYSIS*

ABSTRACT This study investigates the determinants of interregional migration flows in Italy in the light of the upsurge occurred in 1996, after two decades of decreasing internal migration rates. The fixed‐effect vector decomposition estimator (FEVD) is applied to a gravity model using bilateral migration flows for the period 1996–2005. It is shown that the FEVD improves the estimates with respect to the traditional panel data estimators. The GDP per capita and the unemployment rate appear to be the key determinants whose changes push migrants out from their regions and direct them to “better off” destinations. Migrants leaving the regions in the Center‐North respond differently to the push and pull forces compared to southern migrants. The dynamic model provides evidence for the presence of social networks, which in this analysis take place for each pair of regions.     

Regional Labor Market Dynamics, Housing, and Migration

Abstract.  This study explores the impact of plant‐level labor market dynamics and housing markets on gross migration flows. The internal and the external reorganizations of regional labor markets are shown to be related. An increase in internal turnover of jobs and workers in regional labor markets is found to increase net‐migration. This effect arises mainly from a reduction in out‐migration. Housing markets constitute constraints for migration. In particular, an increase in regional housing prices and a large share of owner‐occupancy housing discourages net‐migration to a region by reducing in‐migration. In contrast, the out‐migration rate remains largely unaffected by housing markets.     

The Impact of a Customs Union with the European Union on Internal Migration in Turkey

Abstract The impact of the recent Customs Union (CU) agreement between Turkey and the European Union on internal migration is studied using an intra‐industry trade Computable General Equilibrium (CGE) model with intersectoral capital mobility under two alternative specifications for the labor market: the traditional Harris‐Todaro approach and the existence of a “wage curve” in the urban sector. Under both specifications, the numerical results show that the CU is welfare enhancing and causes a reduction of the urban‐rural wage gap as suggested by theoretical studies. At the same time, it leads to rural‐to‐urban migration and raises the capital rent, results that are counter intuitive with respect to the dual economy literature. Furthermore, the rise in formal labor demand and the migration response to the CU have not resulted in an increase in urban unemployment (i.e. the “Todaro paradox”), but rather to a fall in the unemployment pool. The study also shows that the Bhagwati‐Srinivasan proposal of maximizing welfare by uniformly subsidizing the entire labor market is impracticable, especially if the high wage union sector can negotiate employment conditions.     

SPATIAL HETEROGENEITY AND THE WAGE CURVE REVISITED*

ABSTRACT Most “wage curve” studies ignore the geography of local labor markets. However, when a local labor market is in close proximity of other labor markets, a local shock that increases unemployment may not lead to lower pay rates if employers fear outward migration of their workers. Hence, the unemployment elasticity of pay will be greater, the more isolated the local labor market is. Wages are also expected to be higher in regions that interact strongly with other regions. These hypotheses are confirmed by means of an estimation of wage curves with data for 327 regions of western Germany over the period 1990–1997.     

RURAL–URBAN MIGRATION AND UNEMPLOYMENT: THEORY AND POLICY IMPLICATIONS*

ABSTRACT We develop a regional model where, in the city, unemployment prevails because of too high (efficiency) wages, while, in the rural area, workers are paid at their marginal productivity. We characterize the steady‐state equilibrium and show that it is unique. We then consider two policies: decreasing urban unemployment benefits and subsidizing urban employment. We find that decreasing the unemployment benefit in the city creates urban jobs and reduces rural–urban migration since new migrants have to spend some time unemployed before they can find a job in the city. On the other hand, raising employment subsidies increases urban employment but may also increase urban unemployment because it triggers more rural–urban migration. In this respect, the employment subsidy policy can backfire by raising rather than reducing urban unemployment.     

The effects of internal migration on regional wage and unemployment disparities in Canada

"This paper examines the role of the migration mechanism in the context of a general interregional factor flow adjustment model. Using an estimation technique, which pools cross-section and time series data, the direct effects of migration flows and regional investment on the growth of regional wages and unemployment [in Canada] are examined. The results suggest that migration has a small, but significant impact on regional wages and unemployment rates."     

Integration by Migration?

"In terms of trade and capital flows, the Middle East is one of the least economically integrated regions of the world. The major exception is labor mobility, where intraregional migration flows are extensive. The explanation for this pattern lies in the extreme differences in factor endowments across the region and development policies adopted by both labor-importing and exporting countries. Because the obstacles to trade in goods have been greater than the obstacles to migration, labor mobility and its associated capital flows have been the most important mechanism through which the benefits of the oil windfall have been spread to the poorer states of the region. There is evidence that incomes across the Middle East have become more equal."     

Spatial variations and clustering in the rates of youth unemployment and NEET: A comparative analysis of Italy,Spain, and the UK

We investigate the “determinants” of spatial variations in youth unemployment and NEET rates, and the presence of spatial clusters, for Italy, Spain and the UK. We aggregate Labour Force Survey data for the period 1993–2018 to a “regional” level. We find that youths are sensitive to aggregate labor market conditions and a discouraged worker effect. In the UK and Spain, temporary jobs are more likely to be preferred to part-time jobs, whereas in Italy the opposite occurs. There is evidence of spatial clustering of youth unemployment and NEET rates. We discuss the implications for place-based regional and labor market policies.     

The Impact of Migration on Wages: Empirical Evidence from French Youth*

Abstract. This paper deals with the impact of migration on wages. We introduce a spatial dimension into the job search framework, so that the agent faces neither the same job offer distribution nor the same search costs when looking for a job inside his local labor market. This is in comparison to the agent searching outside his local labor market, where migration costs are a factor. We estimate wage equations in which we introduce the decision to migrate as a binary choice, and later as a polychotomic choice (stayer/mover from provinces to Paris/mover from provinces to provinces). We find no selection effect for people with low levels of education, and a positive selection effect for highly educated migrants. When we distinguish the migration destination for highly educated from provinces, we find a hierarchical effect, that is, the selection effect is higher for men who migrate to Paris than for those who migrate to other provinces.     

TheConvergence of the Italian Regions and Unemployment: Theory and Evidence

We explore the links between the halt of the convergence process of Italian regions at the beginning of the 1970s and the increase in regional unemployment dispersion. We consider a neoclassical exogenous growth model with an imperfect labor market and show that during the transitional dynamics the imperfections of the labor market negatively influence the output growth rate. In particular, the model implies that centralized bargaining is likely to set a national minimum wage that is too high with respect to the labor productivity of the less developed regions, resulting in a negative impact on their per capita output growth. We test the implications of the model on a regional panel data set using the GMM framework. Both our market distortion measure and the unemployment rate are found to significantly lower the growth rate of per capita output.     

Who goes to Russia? Understanding gendered migration patterns

Because of its relatively recent emergence as an international migrant destination, the Russian Federation provides an interesting context to examine when and how migrant flows “masculinize” or “feminize.” While recent migration to Russia appears to be male-dominated, the sex composition of registered migrant flows has varied substantially throughout the post-Soviet period, and there is significant variation in the sex composition of flows from different origin countries. I use multiple origin- and destination-based data-sets to identify gender differences in both the number and characteristics of migrants to Russia from Azerbaijan, Georgia, Tajikistan, Ukraine, and Vietnam. These data show that labor migration from Tajikistan, Azerbaijan, and probably Georgia is male-dominated, with women coming as tied migrants, while men and women are equally likely to be labor migrants coming from Ukraine and Vietnam. In addition, high levels of human capital are an important motivating factor for women’s migration in the former Soviet Union. These findings highlight the importance of considering both origin and destination factors to understand the gender dynamics of migrant flows.     

The Global Economic Crisis and Unemployment in China

Two noted academic specialists on labor economics and population statistics of China examine the impacts of the global economic crisis of 2008-2009 on the job security of urban workers, and the ensuing repercussions for the Chinese society and economy. More specifically, they probe and determine the magnitude of urban unemployment in China in 2008 and 2009 as it appears to be reported in different segments of the country's immense labor market. A particular focus of the paper is on differences in unemployment among two groups of workers (those with urban hukou vis-à-vis rural migrant workers) with significantly different sets of rights and privileges, as well as levels of job security. The authors also provide an estimate of the urban unemployment rate in 2009 that differs from the official rate. They argue that measures toward further integration of rural and urban labor markets and reducing natural unemployment are ultimately more beneficial than short-term interventions to adjust cyclical joblessness stemming from the global economic crisis and recession.     

A Conditional Logit Approach to U.S. State-to-State Migration

This paper uses a conditional logit approach to study interstate migration in the United States for each of eleven years, from 1986–1987 to 1996–1997. We test substantive hypotheses regarding migration in the United States and demonstrate the richness of the conditional logit approach in studies of place-to-place migration. We investigate migration responses to relative economic opportunities (unemployment rate, per capita income) and the associated costs of moving (distance between origin and destination and its square). We also investigate how noneconomic factors, such as amenities, affect migration between states through a state fixed effect. Finally, we study the magnitude of unmeasured costs associated with a particular migration. The conditional logit model also allows us to compute various trade-off and other values that are of interest in migration analysis.     

SEARCH FRICTIONS,UNEMPLOYMENT, AND HOUSING IN CITIES: THEORY AND POLICIES

We propose an urban search‐matching model with land development. Wages, unemployment, prices of housing and land are endogenously determined. We characterize the steady‐state equilibrium and then discuss the issue of efficiency. To explore interactions among markets, we implement comparative static analysis. We also consider three policies: an entry‐cost policy that reduces firms' entry, a transportation policy that reduces commuting costs, and a housing policy that decreases rental prices. We find that the transportation and housing policies are more efficient if the unemployment rate is low, while the entry‐cost policy is more efficient if the unemployment rate is high.     

Wage Effects of Unemployment Duration and Frequency

This paper analyzes the wage effects of unemployment duration and frequency for different regional labor market situations in The Netherlands using a simultaneous equations approach. The main finding is that unemployment duration has a significant negative effect and the frequency of unemployment a significant positive effect on wages in the core regions with relatively low unemployment rates. In the periphery with relatively high unemployment rates no significant effects of unemployment duration and frequency are found. It is argued that in the core regions unemployment duration is primarily viewed as a personal indicator of low productivity whereas in the periphery it is attributed to the situation in the regional labor market.     

Why do students leave school early in OECD countries? The role of regional labor markets and school policies

This paper examines the determinants of early school leaving (ESL) in a panel of 371 regions of OECD countries observed between 1998 and 2019. The empirical analysis includes both local factors previously emphasized by micro-economic studies and national-level factors such as education policies. We find that labor market opportunities for young people, as captured by the youth unemployment rate or the size of low-skill sectors, can pull students out of school. Conversely, late access to a large number of vocational education tracks, high preprimary enrollment and continuous training for teachers are strongly and negatively correlated with ESL rates.