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Unemployment and Migration: Does Moving Help?
Author(s) -
Pekkala Sari,
Tervo Hannu
Publication year - 2002
Publication title -
scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/1467-9442.00305
Subject(s) - unemployment , economics , human capital , employability , labour economics , demographic economics , unemployment rate , economic growth
The migration behaviour of the unemployed in Finland is analysed in terms of the causal effect of moving on individual employment status. In 1994, 17 percent of the labour force was unemployed and the unemployment rate exhibited a very slow decline in 1994–1996. Over half of those who were unemployed at the end of 1994 were still unemployed two years later. The propensity to find a job is somewhat greater among migrants. However, the positive effect of moving diminishes once other personal characteristics are accounted for. Moreover, when controlling for endogenous migrant selectivity, an insignificant or even negative effect on employment status emerges. This indicates that the relatively better “quality” of the migrants (e.g. age, education, human capital and unobserved ability), rather than the act of moving itself, causes an improvement in re–employability. Hence, migration alone may not be a very effective mechanism for alleviating individual unemployment. JEL classification : J 61; J 64