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Why do People Stay? The Insider Advantages Approach: Empirical Evidence from Swedish Labour Markets


  • Fischer, Peter A
  • Holm, Einar
  • Malmberg, Gunnar
  • Straubhaar, Thomas


Migration research has been quite successful in explaining changes in migration flows. Less satisfactory are its answers as to why the overwhelming majority of people remain immobile, despite persistent regional wealth differences and economic integration proceeding. We suggest complementing traditional theories with an insider advantages approach towards immobility. Most people do not move because by staying immobile they have accumulated work- and leisure-oriented insider advantages that are location-specific and would be lost in case of emigration. Therefore, the longer people have stayed and the more insider advantages they have accumulated, the less likely they are to move. Using a new micro dataset covering all people resident in Sweden in 1994 and their mobility experience since 1985, we find a strong positive duration dependence of the probability to stay even after controlling for a large set of alternative factors. Traditional microeconomic characteristics prove helpful in explaining immobility, while regional macroeconomic differences have very little impact on individual mobility decisions. A large number of moves between Swedish labour markets seem related to specific life-course events, of which getting unemployed is only one. Factors that are not dependent on one’s own work but ought to increase location-specific insider-advantages (like having a working partner, having children or owning a house), increase the probability of staying even further.

Suggested Citation

  • Fischer, Peter A & Holm, Einar & Malmberg, Gunnar & Straubhaar, Thomas, 1998. "Why do People Stay? The Insider Advantages Approach: Empirical Evidence from Swedish Labour Markets," CEPR Discussion Papers 1952, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:1952

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    References listed on IDEAS

    1. David Autor & Lawrence Katz & Alan Krueger, 1997. "Computing Inequality: Have Computers Changed the Labor Market?," Working Papers 756, Princeton University, Department of Economics, Industrial Relations Section..
    2. Andreas Hornstein & Per Krusell, 1996. "Can Technology Improvements Cause Productivity Slowdowns?," NBER Chapters,in: NBER Macroeconomics Annual 1996, Volume 11, pages 209-276 National Bureau of Economic Research, Inc.
    3. Elhanan Helpman & Manuel Trajtenberg, 1994. "A Time to Sow and a Time to Reap: Growth Based on General Purpose Technologies," NBER Working Papers 4854, National Bureau of Economic Research, Inc.
    4. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
    5. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed the Labor Market?," The Quarterly Journal of Economics, Oxford University Press, vol. 113(4), pages 1169-1213.
    6. Murphy, Kevin M & Welch, Finis, 1990. "Empirical Age-Earnings Profiles," Journal of Labor Economics, University of Chicago Press, vol. 8(2), pages 202-229, April.
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    9. Philippe Aghion & Peter Howitt, 1999. "On the Macroeconomic Effects of Major Technological Change," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 25, pages 15-32.
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    Cited by:

    1. Harald Badinger & Thomas Url, 2002. "Determinants of regional unemployment: some evidence from Austria," Regional Studies, Taylor & Francis Journals, vol. 36(9), pages 977-988.
    2. Eriksson, Rikard & Rodr�guez-Pose, Andr�s, 2017. "Job-related Mobility and Plant Performance in Sweden," CEPR Discussion Papers 12018, C.E.P.R. Discussion Papers.

    More about this item


    immobility of people; insider advantages; Migration; Swedish labour markets;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population


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