It’s not me, it’s you: internal migration and local wages in Great Britain

Carolin Ioramashvili

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Differences in regional incomes are large and persistent in many countries. On the one hand, internal migration from low- to high-income regions might eradicate these differences over time. On the other hand, internal migration might exacerbate disparities, as receiving regions benefit from incoming skills and agglomeration economies. This paper estimates the effect of internal in- and out-migration on the earnings of employees who do not move, using a panel of employee records from Great Britain between 2004 and 2018. Employees are tracked and identified as internal migrants if they start working in a new travel-to-work area (TTWA), representing functional labour market areas. The share of in- and out-migrants is significantly correlated with earnings and earnings growth of non-migrants in a TTWA. The results show that in-migrants have an immediate negative effect on local earnings of non-migrants. After three years, in-migration is positively correlated with earnings growth. These effects are exclusively driven by urban areas. Out-migrants have no significant effects. The results provide some evidence that labour mobility can be used as a tool to encourage local growth, albeit with significant adjustment costs.

Keywords: internal migration; labour mobility; income; earnings; labour markets; employment (search for similar items in EconPapers)
JEL-codes: D31 R11 R23 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2023-12-21
New Economics Papers: this item is included in nep-geo and nep-ure
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Published in Regional Studies, Regional Science, 21, December, 2023, 10(1), pp. 876 - 888. ISSN: 2168-1376

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:121382

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