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Jobs or Amenities – What determines the migration balances of cities?

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  • Annekatrin Niebuhr

    ()

  • Tanja Buch
  • Silke Hamann
  • Anja Rossen

Abstract

The population growth of cities in industrialized countries is characterized by striking disparities. While some cities experience a kind of resurgence in recent years others suffer from an ongoing depopulation. In this context an important issue refers to the question whether labour market conditions or amenities primarily account for the huge differences in cities’ demographic prospects. We investigate the determinants of migration balances of German cities focusing on mobility of workers and the significance of jobs and amenities. With investigating cities’ migration balances we choose a rather direct measure of urban attractiveness – in contrast to studies that use employment growth or other indicators. Both the striking and persistent disparities in labour market performance and amenities across cities and the high internal migration – in particular between East and West Germany – predestine the country for an analysis of the determinants of urban migration balances. Moreover, massive demographic changes are already visible in several regions, notably in East Germany, and affect the economic and social perspectives of cities. The regression analysis rests on a panel data set that covers the period from 2000 to 2007. In order to deal with unobserved heterogeneity and bias due to endogenous regressors fixed effects models and instrument variable estimation are applied. Our results suggest that different groups of factors influence the urban net migration rates. Local labour market conditions influence the mobility decision but amenities matter too. There is some indication that relatively high wages, low unemployment and especially the creation of new jobs attracts mobile workers. Moreover, the quality of life that a city offers is an important factor for the migration balance. This is in particular reflected by the robust effects of the urban recreation area and the average flat size. Our findings also point to relevance of climatic conditions and accessibility. Beyond we identify a size effect, i.e. large cities seem to be ceteris paribus more attractive than small cities. This suggests that agglomeration economies impact on the migration decision of workers. Residents of larg cities seem to benefit from consumption of goods such as theatres and other cultural infrastructure that are only supplied if demand exceeds a certain threshold. But the positive correlation between city size and region specific effects might also reflect matching externalities that arise in large (labour) markets.

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Bibliographic Info

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa12p401.

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Date of creation: Oct 2012
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Handle: RePEc:wiw:wiwrsa:ersa12p401

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  1. Chen, Yong & Rosenthal, Stuart S., 2008. "Local amenities and life-cycle migration: Do people move for jobs or fun?," Journal of Urban Economics, Elsevier, vol. 64(3), pages 519-537, November.
  2. Edward L. Glaeser & Joshua D. Gottlieb, 2006. "Urban Resurgence and the Consumer City," Harvard Institute of Economic Research Working Papers 2109, Harvard - Institute of Economic Research.
  3. Edward L. Glaeser & Matthew G. Resseger, 2010. "The Complementarity Between Cities And Skills," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 221-244.
  4. Edward L Glaeser & Jesse M Shapiro, 2003. "Urban Growth in the 1990s: Is City Living Back?," Journal of Regional Science, Wiley Blackwell, vol. 43(1), pages 139-165.
  5. Edward L. Glaeser & Jed Kolko & Albert Saiz, 2000. "Consumer City," Harvard Institute of Economic Research Working Papers 1901, Harvard - Institute of Economic Research.
  6. Chunhua Wang & JunJie Wu, 2011. "Natural amenities, increasing returns and urban development," Journal of Economic Geography, Oxford University Press, vol. 11(4), pages 687-707, July.
  7. Arntz, Melanie, 2006. "What attracts human capital? Understanding the skill composition of interregional job matches in Germany," ZEW Discussion Papers 06-62, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  8. Thiess Buettner & Alexander Ebertz, 2009. "Quality of life in the regions: results for German Counties," The Annals of Regional Science, Springer, vol. 43(1), pages 89-112, March.
  9. Schwartz, Aba, 1973. "Interpreting the Effect of Distance on Migration," Journal of Political Economy, University of Chicago Press, vol. 81(5), pages 1153-69, Sept.-Oct.
  10. Allen J. Scott, 2010. "Jobs or amenities? Destination choices of migrant engineers in the USA," Papers in Regional Science, Wiley Blackwell, vol. 89(1), pages 43-63, 03.
  11. Ivan Etzo, 2011. "The Determinants Of The Recent Interregional Migration Flows In Italy: A Panel Data Analysis," Journal of Regional Science, Wiley Blackwell, vol. 51(5), pages 948-966, December.
  12. Gary L. Hunt & Richard E. Mueller, 2004. "North American Migration: Returns to Skill, Border Effects, and Mobility Costs," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 988-1007, November.
  13. Jesse M. Shapiro, 2006. "Smart Cities: Quality of Life, Productivity, and the Growth Effects of Human Capital," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 324-335, May.
  14. Vicente Royuela & Rosina Moreno & Esther Vaya, 2010. "Influence of Quality of Life on Urban Growth: A Case Study of Barcelona, Spain," Regional Studies, Taylor & Francis Journals, vol. 44(5), pages 551-567.
  15. Enrico Moretti, 2010. "Local Multipliers," American Economic Review, American Economic Association, vol. 100(2), pages 373-77, May.
  16. Greenwood, Michael J. & Hunt, Gary L., 1989. "Jobs versus amenities in the analysis of metropolitan migration," Journal of Urban Economics, Elsevier, vol. 25(1), pages 1-16, January.
  17. Pissarides, Christopher A & McMaster, Ian, 1990. "Regional Migration, Wages and Unemployment: Empirical Evidence and Implications for Policy," Oxford Economic Papers, Oxford University Press, vol. 42(4), pages 812-31, October.
  18. Brigitte Waldorf, 2009. "Is human capital accumulation a self-propelling process? Comparing educational attainment levels of movers and stayers," The Annals of Regional Science, Springer, vol. 43(2), pages 323-344, June.
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