Unemployment and Migration: Does Moving Help?

19 Pages Posted: 7 May 2003

See all articles by Sari Pekkala

Sari Pekkala

University of Jyväskylä - School of Business and Economics

Hannu Tervo

University of Jyväskylä - School of Business and Economics

Abstract

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: J61, J64

Suggested Citation

Pekkala, Sari and Tervo, Hannu, Unemployment and Migration: Does Moving Help?. Available at SSRN: https://ssrn.com/abstract=371859

Sari Pekkala (Contact Author)

University of Jyväskylä - School of Business and Economics ( email )

University of Jyväskylä
PO Box 35
FIN 40351, FIN-40014
Finland

Hannu Tervo

University of Jyväskylä - School of Business and Economics ( email )

University of Jyväskylä
PO Box 35
FIN 40351, FIN-40014
Finland
+358 14 2603344 (Phone)

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