Regional development

Labour mobility and development dynamics in OECD regions

 

Presentation by Monica Brezzi and Mario Piacentini
OECD Regional Development Policy Division

 

Ageing and migration within and between countries represent key challenges for regional policy in the coming years, as marked regional differences exist for both phenomena. Important local labour shortages can emerge as a consequence of ageing and substantial outmigration. While unemployment might decrease in the short term through out-migration, employment growth and productivity can suffer if those leaving are the most talented, educated and entrepreneurial. This paper analyzes the geography of internal mobility across regions and identifies the main drivers of regional outflows. While in general rural regions tend to experience out migration and depopulation and metropolitan regions positive inflows, it is shown that the “traditional” labour mobility between rural and urban areas does not explain all, and mismatch of supply- demand factors linked to segmented markets seems to play a greater role also within a same type of regions. Many regions experience sustained negative net-migration during all the decade 1999-2008.Through regression models on TL3 regions of OECD countries, we investigate the main drivers of regional outflows and internal mobility of young adults. Preliminary evidence with panel data shows that migration-induced decreases in labour supply do not reduce regional unemployment, suggesting the possibility of a sustained downward economic spiral linking outmigration and economic distress. The paper concludes with a preliminary review of the main domains for which regional policy is implicated, namely regional labour market policies, infrastructure and service delivery.

 

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