The Unassuming Economist

From a VoxEU post by Orsetta Causa, Maria Chiara Cavalleri, Michael Abendschein, and Nhung Luu:

“The capacity of workers to move regions in response to local economic shocks is a key dimension of labour market dynamism that could contribute to recovery from the COVID-19 crisis and support the green transition. This column presents new empirical evidence on how policies can shape the responsiveness of inter-regional migration to regional economic conditions, with a particular focus on housing markets, social policies, and business regulations. It highlights the need for articulating place-based policies to help prospective movers as well as stayers

Inter-regional migration can contribute to the smooth and inclusive recovery from the COVID-19 crisis (for instance, by helping to match workers and jobs) as well to the green transition (for instance, by helping labour reallocation towards low-carbon activities). Mobility across regions can also contribute to upward social mobility, for instance by allowing workers to move out of disadvantaged areas or declining sectors. While promoting mobility is not an end in itself, managing mobility is an important policy challenge, especially in countries with large and persistent spatial disparities between regions.

Recent work by the OECD (Causa et al. 2021, Cavalleri et al. 2021, OECD 2021a) examines the levels and trends of inter-regional migration within and across OECD countries. It presents novel cross-country and country-specific empirical evidence on economic and housing-related factors affecting people’s decisions to move to a different region within the same country. This work shows how policies influence the responsiveness of regional migration to regional economic conditions and shocks. It also contributes to the renewed interest in regional inequalities and placed-based policies (Siegloch et al. 2021, Ku et al. 2020, Iammarino et al. 2019).

We find that inter-regional migration varies significantly across OECD countries (Figure 1). In high-mobility countries, such as Hungary and Korea, around 5% of the population moves to another region each year. By contrast, mobility rates are below 1% in some Eastern and Southern European countries, such as Slovakia, Poland and Italy.”

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