Migration and Regional Unemployment in Italy

Abstract

Does interregional migration equilibrate regional labor market performances? We answer this question focusing on regional unemployment dynamics in Italy over the 1995-2006 period, when a strong flow of out-migration from the South to the North occurred. Using System-GMM estimators for spatial dynamic panel data models in the presence of endogenous variables, the empirical analysis documents that past migration flows exert a negative effect on current regional unemployment. By falsifying the common wisdom, our results thus indicate that migration flows are likely to magnify spatial disparities in unemployment rates rather than mitigate them.