Determinants of Interregional Mobility in Russia: Evidence from Panel Data

Abstract

The Paper studies determinants of internal migration in Russia. Using panel data on gross region-to-region migration flows in 1992-99, we estimate the effect of economic, political and social factors. Although overall migration is rather low, it turns out that its intensity does depend on economic factors even controlling for fixed effects for each origin-destination pair. People move from poorer and job-scarce regions with worse public good provision to ones that are richer and more prosperous both in terms of employment prospects and public goods. Migration is, however, constrained by the lack of liquidity; for the poorest regions, an increase in income raises rather than decreases emigration. Our estimates imply that up to a third of Russian regions are locked in poverty traps.

Keywords: Internal migration, liquidity constraints, gravity model, Russia's transition

JEL Classification: J61, P23, R23