Job Loss and Regional Mobility

56 Pages Posted: 2 Dec 2016 Last revised: 7 Dec 2016

See all articles by Kristiina Huttunen

Kristiina Huttunen

Aalto University - Department of Economics

Jarle Møen

Norwegian School of Economics (NHH) - Department of Business and Management Science

Kjell G. Salvanes

Norwegian School of Economics (NHH) - Department of Economics; IZA Institute of Labor Economics

Date Written: September 29, 2016

Abstract

It is well documented that displaced workers suffer severe earnings losses, but not why this is so. One reason may be that workers are unable or unwilling to move to regions with better employment opportunities. We study this and find that job displacement increases regional mobility but the mobility decisions are driven also by non-economic factors such as family ties. As a results, movers tend to be a heterogeneous group. We find that on average displaced workers who move suffer larger income losses than displaced workers who stay in the same region. However, the entire post displacement income difference between movers and stayers is driven by workers moving to regions where parents live or to rural areas.

Keywords: plant closures, downsizing, regional mobility, earnings, family ties

Suggested Citation

Huttunen, Kristiina and Moen, Jarle and Salvanes, Kjell G., Job Loss and Regional Mobility (September 29, 2016). NHH Dept. of Economics Discussion Paper No. 17/2016. Available at SSRN: https://ssrn.com/abstract=2879385 or http://dx.doi.org/10.2139/ssrn.2879385

Kristiina Huttunen

Aalto University - Department of Economics ( email )

PO Box 1210
FI-00101 Helsinki
Finland

Jarle Moen

Norwegian School of Economics (NHH) - Department of Business and Management Science ( email )

Helleveien 30
Bergen, NO-5045
Norway

Kjell G. Salvanes (Contact Author)

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway
+47 5 595 9315 (Phone)
+47 5 595 9543 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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