Geographic Mobility over the Life-Cycle

Antonia Díaz, Álvaro Jáñez and Felix Wellschmied
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Álvaro Jáñez: Stockholm School of Economics

No 15896, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: When mobility between locations is frictional, a person's economic well-being is partially determined by her place of birth. Using a life cycle model of mobility, we find that search frictions are the main impairment to the mobility of young people in Spain, and these frictions are particularly strong in economically distressed locations. As a result, being born in a high-unemployment urban area carries with it a large welfare penalty. Less stable jobs, slower skill accumulation, lower average wages, and fewer possibilities for geographic mobility all contribute to these welfare losses. Paying transfers to people in distressed economic locations decreases these welfare losses without large adverse effects on mobility. In contrast, several policies that encourage people to move to low-unemployment urban areas increase these welfare losses and fail to meaningfully increase mobility towards these more successful locations.

Keywords: mobility; local labor markets; search frictions; life cycle; dynamic spatial models (search for similar items in EconPapers)
JEL-codes: E20 E24 E60 J21 J61 J63 J64 J68 R23 R31 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2023-01
New Economics Papers: this item is included in nep-dge, nep-geo, nep-lab, nep-ltv, nep-mig and nep-ure
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Related works:
Working Paper: Geographic Mobility Over the Life-cycle (2023)
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