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Economic Shocs and Internal Migration

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  • Joan Monras

    (Département d'économie)

Abstract

Previous literature shows that internal migration rates are strongly procyclical. This would seem to imply that geographic relocation does not help mitigate negative local economic shocks during recessions. This paper shows that this is not the case. I document that net in-migrationrates decreased in areas more affected by the Great Recession. Using various IV strategies that rely on the importance of the construction sector and the indebtedness of households before the crisis, I conclude that internal migration might help to alleviate up to one third of the effects of the crisis on wages in the most affected locations. This is due to a disproportionate decrease in in-migration into those locations rather than an increase in out-migration. More generally, I show that differences in population growth rates across locations are mainly explained by differences in in-migration rates rather than in out-migration rates. I introduce a model to guide the empirical analysis and to quantify the spill-over effects caused by internal migration.

Suggested Citation

  • Joan Monras, 2015. "Economic Shocs and Internal Migration," Sciences Po Economics Discussion Papers 2015-01, Sciences Po Departement of Economics.
  • Handle: RePEc:spo:wpecon:info:hdl:2441/6g9o9cr3pl8c1p3gnsu388c9bj
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Joan Monras & Javier Vázquez-Grenno & Ferran Elias, 2017. "Understanding the Effects of Legalizing Undocumented Immigrants," CReAM Discussion Paper Series 1708, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    2. Ouedraogo, Abdoulaye, 2016. "Local economic impact of boom and bust in mineral resource extraction in the United States: A spatial econometrics analysis," Resources Policy, Elsevier, vol. 50(C), pages 292-305.
    3. Rafael Dix-Carneiro & Brian K. Kovak, 2015. "Trade Reform and Regional Dynamics: Evidence From 25 Years of Brazilian Matched Employer-Employee Data," NBER Working Papers 20908, National Bureau of Economic Research, Inc.
    4. repec:eee:regeco:v:75:y:2019:i:c:p:1-21 is not listed on IDEAS
    5. Gregory Howard, 2017. "The Migration Accelerator: Labor Mobility, Housing, and Aggregate Demand," 2017 Meeting Papers 563, Society for Economic Dynamics.
    6. Brülhart, Marius & Carrère, Céline & Robert-Nicoud, Frédéric, 2018. "Trade and towns: Heterogeneous adjustment to a border shock," Journal of Urban Economics, Elsevier, vol. 105(C), pages 162-175.
    7. Monras, Joan, 2015. "Minimum Wages and Spatial Equilibrium: Theory and Evidence," IZA Discussion Papers 9460, Institute of Labor Economics (IZA).
    8. Dix Carneiro,Rafael & Kovak,Brian K., 2015. "Trade reform and regional dynamics : evidence from 25 years of Brazilian matched employer-employee data," Policy Research Working Paper Series 7205, The World Bank.
    9. Suphanit Piyapromdee, 2017. "The Impact of Immigration on Wages, Internal Migration and Welfare," PIER Discussion Papers 69, Puey Ungphakorn Institute for Economic Research, revised Sep 2017.
    10. Michael Amior & Alan Manning, 2018. "The Persistence of Local Joblessness," American Economic Review, American Economic Association, vol. 108(7), pages 1942-1970, July.
    11. repec:wfo:wstudy:59156 is not listed on IDEAS
    12. Vellore Arthi & Brian Beach & W. Walker Hanlon, 2017. "Estimating the Recession-Mortality Relationship when Migration Matters," NBER Working Papers 23507, National Bureau of Economic Research, Inc.
    13. Giuranno, Michele G. & Rongili, Biswas, 2012. "Internal migration and public policy," MPRA Paper 94217, University Library of Munich, Germany, revised 23 May 2019.
    14. Albert, Christoph & Monras, Joan, 2017. "Immigrants' Residential Choices and Their Consequences," IZA Discussion Papers 11075, Institute of Labor Economics (IZA).
    15. Parkhomenko, Andrii, 2016. "Opportunity to Move: Macroeconomic Effects of Relocation Subsidies," MPRA Paper 75256, University Library of Munich, Germany.
    16. Christian Dustmann & Uta Schönberg & Jan Stuhler, 2016. "The Impact of Immigration: Why Do Studies Reach Such Different Results?," Journal of Economic Perspectives, American Economic Association, vol. 30(4), pages 31-56, Fall.
    17. Danny Yagan, 2017. "Employment Hysteresis from the Great Recession," NBER Working Papers 23844, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Internal migration and local labor demand shocks.;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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