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Job Loss and Regional Mobility

Author

Listed:
  • Huttunen, Kristiina

    (Aalto University School of Economics)

  • Møen, Jarle

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Salvanes, Kjell G.

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

Abstract

It is well documented that displaced workers suffer severe earnings losses, but not why this is so. One reason may be that workers are unable or unwilling to move to regions with better employment opportunities. We study this and find that job displacement increases regional mobility but the mobility decisions are driven also by non-economic factors such as family ties. As a results, movers tend to be a heterogeneous group. We find that on average displaced workers who move suffer larger income losses than displaced workers who stay in the same region. However, the entire post displacement income difference between movers and stayers is driven by workers moving to regions where parents live or to rural areas.

Suggested Citation

  • Huttunen, Kristiina & Møen, Jarle & Salvanes, Kjell G., 2016. "Job Loss and Regional Mobility," Discussion Paper Series in Economics 17/2016, Norwegian School of Economics, Department of Economics.
    • Handle: RePEc:hhs:nhheco:2016_017
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    More about this item

    Keywords

    Plant closures; downsizing; regional mobility; earnings; family ties.;
    All these keywords.

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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