It’s not me, it’s you: internal migration and local wages in Great Britain

Ioramashvili, Carolin (2023) It’s not me, it’s you: internal migration and local wages in Great Britain. Regional Studies, Regional Science, 10 (1). 876 - 888. ISSN 2168-1376

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Abstract

Differences in regional incomes are large and persistent in many countries. On the one hand, internal migration from low- to high-income regions might eradicate these differences over time. On the other hand, internal migration might exacerbate disparities, as receiving regions benefit from incoming skills and agglomeration economies. This paper estimates the effect of internal in- and out-migration on the earnings of employees who do not move, using a panel of employee records from Great Britain between 2004 and 2018. Employees are tracked and identified as internal migrants if they start working in a new travel-to-work area (TTWA), representing functional labour market areas. The share of in- and out-migrants is significantly correlated with earnings and earnings growth of non-migrants in a TTWA. The results show that in-migrants have an immediate negative effect on local earnings of non-migrants. After three years, in-migration is positively correlated with earnings growth. These effects are exclusively driven by urban areas. Out-migrants have no significant effects. The results provide some evidence that labour mobility can be used as a tool to encourage local growth, albeit with significant adjustment costs.

Item Type:	Article
Official URL:	https://www.tandfonline.com/journals/rsrs20
Additional Information:	© 2023 The Author(s)
Divisions:	Geography & Environment
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HC Economic History and Conditions H Social Sciences > HT Communities. Classes. Races
JEL classification:	D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R23 - Regional Migration; Regional Labor Markets; Population
Date Deposited:	16 Jan 2024 11:30
Last Modified:	12 Dec 2024 04:01
URI:	http://eprints.lse.ac.uk/id/eprint/121382

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