Losing Work, Moving Away? Regional Mobility after Job Loss
32 Pages Posted: 2 Sep 2016
Date Written: August 2016
Abstract
Using German survey data, we investigate the relationship between involuntary job loss and regional mobility. Our results show that job loss has a strong positive effect on the propensity to relocate. We also analyze whether the high and persistent earnings losses of displaced workers can in part be explained by limited regional mobility. Applying an event study approach, which controls for worker fixed effects, our findings do not support this conjecture as we find substantial long lasting earnings losses for both movers and stayers. In the short run, movers even face slightly higher losses, but the differences between the two groups of displaced workers are never statistically significant. This challenges whether migration is a beneficial strategy in case of involuntary job loss.
Keywords: job displacement, plant closure, regional mobility, earnings, SOEP
JEL Classification: J61, J63
Suggested Citation: Suggested Citation