The effects of unemployment benefits on migration in lagging regions

Jordi Jofre-Monseny ()
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Jordi Jofre-Monseny: Universitat de Barcelona & IEB

No 2013/10, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: In this paper we analyze the unintended effects on mobility of a national place-based policy (SIPTEA) that provides greater unemployment protection in two lagging regions of southern Spain (namely, Extremadura and Andalucía). Using a border identification strategy and (1981 and 1991) census data at the municipal level, we estimate the effects of SIPTEA on population growth, the probability of staying and in-migration in rural areas that are experiencing high unemployment and significant out-migration flows. The results indicate that the policy mitigated population losses by increasing both the probability of staying and in-migration, although the locational inefficiencies implied are not particularly large. We also explore the effects of greater unemployment protection on labor market outcomes. Here, the results indicate that the policy led to a 10- to 13-percentage point increase in unemployment.

Keywords: Unemployment protection; migration; mobility; place-based policy; lagging regions (search for similar items in EconPapers)
JEL-codes: H73 J6 R23 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2013
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