Returns to migration after job loss—The importance of job match

Author:

Kekezi Orsa12ORCID,Boschma Ron34

Affiliation:

1. Swedish Institute for Social Research (SOFI), Stockholm University, Sweden, Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School (JIBS), Sweden

2. Swedish Institute for Social Research (SOFI), Stockholm University, Sweden

3. Department of Human Geography and Spatial Planning, Utrecht University, The Netherlands

4. University of Stavanger, UiS Business School, Stavanger Centre for Innovation Research, Norway

Abstract

Loss of specific human capital is often identified as a mechanism through which displaced workers might experience permanent drops in earnings after job loss. Research has shown that displaced workers who migrate out of their region of origin have lower earnings than those who do not. This paper extends the discussion on returns to migration by accounting for the type of jobs people get and how related they are to their skills. Using an endogenous treatment model to control for selection bias in migration and career change, we compare displaced stayers with displaced movers in Sweden. Results show that migrants who get a job that matches their occupation- and industry-specific skills display the highest earnings among all displaced workers. If migration is combined with a job mismatch, earning losses are instead observed. This group experiences the lowest earnings among all displaced workers.

Publisher

SAGE Publications

Subject

Environmental Science (miscellaneous),Geography, Planning and Development

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