Losing a job and (dis)incentives to move: Interregional migration in Finland

• Published in: European urban and regional studies Vol. 30; no. 4; pp. 430 - 445
• Main Authors: Maczulskij, Terhi, Böckerman, Petri
• Format: Journal Article
• Language: English
• Published: London, England SAGE Publications 01.10.2023; Sage Publications Ltd
• Subjects: Childhood; Connectedness; Dislocated workers; Displaced workers; Earnings; Economic incentives; Employment; Family relations; Home ownership; Housing; Housing costs; Incentives; Individual differences; Migration; Mobility; Prices; Prospects; Regional differences; Regional variations; Rural areas; Rural communities; Social factors; Unemployment benefits; housing markets; job displacement; social connections; Economic incentives; unemployment benefits; internal migration
• ISSN: 0969-7764; 1461-7145
• DOI: 10.1177/09697764231186746

Traditional theories of migration frequently fail to fully explain the real-world patterns of interregional mobility. Empirical studies indicate that individuals may not always migrate for economic reasons such as poor employment and income prospects. Which characteristics drive people to stay or move after job displacement? Using information on establishment closures, we analyse the economic and social determinants of interregional mobility following job loss. We base our empirical analysis on nationwide individual-level register data from Finland for 1997–2015. We find that receiving earnings-based unemployment benefits substantially weakens the economic incentives for interregional mobility. This negative association is particularly strong for the lower educated and those living in more rural areas. Moreover, our results show that the migration decisions of displaced workers are strongly affected by homeownership, differences in regional housing prices, and social connections, as measured by childhood family relations.