The migration response to local labour market shocks: Evidence from EU regions during the global economic crisis

Abstract

The global economic crisis has strongly affected Europe's economic geography. This study investigates the role of local labour market disparities in determining regional net in-migration rates. While only a weak link is detected in the precrisis period, the local labour market context of migration grows significantly stronger during the crisis. Decompositions of the estimation results show that changes in migration rates are firstly a result of widened disparities across European regions throughout the crisis. However, also behavioural adjustment processes occur, e.g. an orientation of migrants towards urban areas and away from regions with persistently high long-run unemployment rates.