Working Paper: CEPR ID: DP3798
Authors: Jan Fidrmuc
Abstract: Does migration facilitate regional adjustment to idiosyncratic shocks? The evidence from post-communist economies indicates that the efficacy of migration in reducing inter-regional unemployment and wage differentials has in fact been rather low. High wages appear to encourage - and, similarly, high unemployment tends to discourage - overall migration – inbound and outbound – rather than induce a net flow from depressed regions to those with better economic conditions. Even when the impact of unemployment and wages on net migration is statistically significant, it is economically very small. Finally, migration flows have actually been declining in the course of transition, even as inter-regional disparities have been rising.
Keywords: migration; optimum currency areas; regional adjustment; regional shocks
JEL Codes: F22; J61; P23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Net migration (F22) | Regional adjustment to shocks (F32) |
| High wages (J31) | Migration flows (F22) |
| High unemployment (J64) | Migration flows (F22) |
| Favorable economic conditions (P17) | High rates of immigration and emigration (J11) |
| Depressed regions (R11) | Low mobility (J62) |
| Average wages (J31) | Net migration (F22) |
| Unemployment rates (J64) | Net migration (F22) |