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.