Unemployment and the Inter-Regional Mobility of Labour

In this paper we examine the relation between unemployment and the interregional migration of labour. First, the status of a worker affects mobility: an unemployed worker is more likely to move than an employed one. Second, regional unemployment differentials encourage mobility: the probability that a given worker migrates is higher if the worker lives in a high-unemployment region. Third, at higher overall unemployment rates the probability of migration is less. We then use data from the Labour Force Survey to estimate the probability of migration. In the next section we explain the role of unemployment in the context of a simple human capital model of mobility and describe the data used for our study. We report the results of estimating migration probabilities in 1983-4 and 1976-7, and use the estimates to calculate predicted migration probabilities for various household types. These probabilities, which give the best numerical summary of our results, are reported, and conclusions regarding the three effects of unemployment on mobility are summarised. -from Authors