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RESEARCH PRODUCT

Unemployment and Migration: Does Moving Help?

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Abstract The migration behaviour of the unemployed in Finland is analysed in terms of the causal effectof moving on individual employment status. In 1994, 17 percent of the labour force wasunemployed and the unemployment rate exhibited a very slow decline in 1994–1996. Overhalf of those who were unemployed at the end of 1994 were still unemployed two years later.The propensity to find a job is somewhat greater among migrants. However, the positive effectof moving diminishes once other personal characteristics are accounted for. Moreover, whencontrolling for endogenous migrant selectivity, an insignificant or even negative effect onemployment status emerges. This indicates that the relatively better ‘‘quality’’ of the migrants(e.g. age, education, human capital and unobserved ability), rather than the act of movingitself, causes an improvement in re-employability. Hence, migration alone may not be a veryeffective mechanism for alleviating individual unemployment.Keywords: Unemployment; migration; employment status; selection biasJEL classification: J61; J64.