Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/54970
Authors: 
Arntz, Melanie
Gregory, Terry
Lehmer, Florian
Year of Publication: 
2011
Series/Report no.: 
ZEW Discussion Papers 11-074
Abstract: 
This paper examines the determinants of gross labour flows in a context where modeling the migration decision as a wage-maximizing process may be inadequate due to regional wage rigidities that result from central wage bargaining. In such a context, the framework that has been developed by Borjas et al. (1992) on the selectivity of internal migrants with respect to skills has to be extended to allow migrants to move to regions that best reward their skills in terms of both wages and employment. The extended framework predicts skilled workers to be disproportionately attracted to regions with higher mean wages and employment rates as well as higher regional wage and employment inequalities. Estimates from a labour flow fixed effects model and a GMM estimator show that these predictions hold, but only the effects for mean employment rates and employment inequality are robust and significant. The paper may thus be able to explain why earlier attempts to explain skill selectivity in Europe within a pure wage-based approach failed to replicate the US results.
Subjects: 
gross migration
selectivity
wage inequality
employment inequality
JEL: 
R23
J31
J61
Document Type: 
Working Paper

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