Economic Shocks and Internal Migration

Joan Monras

No 8840, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Previous literature shows that internal migration rates are strongly procyclical. This would seem to imply that geographic relocation does not help mitigate negative local economic shocks during recessions. This paper shows that this is not the case. I document that net in-migration rates decreased in areas more affected by the Great Recession. Using various IV strategies that rely on the importance of the construction sector and the indebtedness of households before the crisis, I conclude that internal migration might help to alleviate up to one third of the effects of the crisis on wages in the most affected locations. This is due to a disproportionate decrease in in-migration into those locations rather than an increase in out-migration. More generally, I show that differences in population growth rates across locations are mainly explained by differences in in-migration rates rather than in out-migration rates. I introduce a model to guide the empirical analysis and to quantify the spill-over effects caused by internal migration.

Keywords: internal migration; local labor demand shocks (search for similar items in EconPapers)
JEL-codes: F22 J20 J30 J43 J61 R23 R58 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2015-02
New Economics Papers: this item is included in nep-lab, nep-mig, nep-pbe and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (40)

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Related works:
Working Paper: Economic Shocks and Internal Migration (2018)
Working Paper: Economic Shocs and Internal Migration (2015)
Working Paper: Economic Shocs and Internal Migration (2015)
Working Paper: Economic Shocs and Internal Migration (2015)
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