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Job Loss and Migration: Do Family Connections Matter?

  • Terhi Maczulskij ORCID logo EMAIL logo
Published/Copyright: July 15, 2024
The B.E. Journal of Economic Analysis & Policy
From the journal The B.E. Journal of Economic Analysis & Policy Volume 24 Issue 3

Abstract

This paper utilizes administrative employer–employee data to analyze the effect of job loss on interregional migration and to study how family connections, related to childhood family members and birth region preferences, shape these location choices. The results reveal that job loss due to establishment closures increases the probability of interregional migration by nearly 80 %. While local family member connections and birth region preferences pose substantial obstacles to moving, they do not necessarily lead to relocation in response to job loss. Instead, displaced workers tend to migrate to non-birth regions where they have no observed family member connections, although higher economic gains in these regions may partly offset the loss of utility resulting from these factors.

Keywords: birth region; establishment closure; family connections; job loss; migration
Corresponding author: Terhi Maczulskij, ETLA Economic Research, Arkadiankatu 23B, FI-00100 Helsinki, Finland; and IZA Institute of Labor Economics, Schaumburg-Lippe-Strasse 5-9, 53113 Bonn, Germany, E-mail: 

Funding source: Strategic Research Council

Award Identifier / Grant number: 293120

Funding source: Palkansaajasäätiö

Acknowledgments

The author wishes to thank Hannu Karhunen for his helpful comments. Financial support from the Academy of Finland Strategic Research Council project “Work, Inequality and Public Policy” (number 293120) and Palkansaajasäätiö are gratefully acknowledged.

Appendix A

(Table A1)

Table A1:

Population and unemployment rates in travel-to-work areas in 2019.

Code Name Population Unemployment rate, %
01 Helsinki 1,672,162 8.29
04 Lahti 197,845 13.07
05 Kouvola 89,942 12.58
06 Kotka 83,446 13.93
08 Turku 364,589 9.33
09 Loimaa 19,753 8.65
10 Rauma 50,842 8.25
11 Pori 123,822 11.93
12 Kankaanpää 14,946 10.75
13 Parkano 8,377 9.00
14 Tampere 477,904 9.34
15 Lappeenranta 123,913 12.00
16 Mikkeli 70,316 10.64
17 Savonlinna 45,902 13.47
19 Varkaus 25,639 13.83
20 Kuopio 169,085 10.22
21 Iisalmi 46,885 12.15
22 Joensuu 126,290 13.51
23 Nurmes 9,783 14.65
24 Närpes 10,733 4.21
25 Vaasa 113,865 7.21
26 Seinäjoki 114,424 8,03
27 Alajärvi 14,686 9.58
29 Jämsä 22,845 13.62
30 Jyväskylä 212,150 12.38
33 Kokkola 67,106 7.41
34 Raahe 34,310 9.48
35 Oulu 262,977 11.21
36 Kajaani 54,273 10.68
37 Kemi 54,088 12.75
39 Mariehamn 29,789 3.53
43 Uusikaupunki 24,347 5.85
45 Haapajärvi 9,890 7.83

  1. Numbers are based on data from Statistics Finland and own calculations. The unemployment rate is measured as the share of unemployed from the total workforce within 15–65-year-old individuals in a region.

Table B1:

Covariate balance for the variables for the non-matched and matched samples.

Non-matched data Matched data
Treatment group (displaced workers) (1) Control group (non-displaced workers) (2) t-test Treatment group (displaced workers) (3) Control group (non-displaced workers) (4) t-test
Individual characteristics
 Primary education 0.17 0.16 1.34 0.17 0.17 0.49
 Secondary education 0.61 0.63 −3.11 0.61 0.61 −0.20
 Higher education 0.22 0.21 1.34 0.22 0.22 −0.18
 Age 39.1 40.0 −9.64 39.1 39.1 −0.16
 Female 0.37 0.34 4.16 0.37 0.37 −0.32
 Married or cohabiting 0.50 0.53 −10.79 0.50 0.50 −0.60
 Children <7 years old 0.45 0.43 7.64 0.45 0.45 0.17
 Home ownership 0.69 0.75 −14.63 0.69 0.69 −0.14
 Have migrated before 0.13 0.11 2.64 0.13 0.13 0.12
 Family member in region 0.56 0.57 −0.94 0.56 0.56 −0.02
 Birth region 0.56 0.58 −3.61 0.56 0.56 −0.06
 Annual wages (in euros) 42,404 42,851 −1.34 42,404 42,295 0.91
Moved to another region by b + 2 0.032 0.017 0.032 0.019
Number of observations 51,259 4,699,103 51,259 150,583

  1. Migration status is measured in b + 2 and other variables in b − 1. t-test statistics are for equal sample means between the treatment (displaced) and control (non-displaced) groups.

Table B2:

Covariate balance for the variables for the matched sample: two groups based on residing in or outside their birth region.

Residing outside birth region Residing in birth region
Treatment group (displaced workers) (1) Control group (non-displaced workers) (2) t-test Treatment group (displaced workers) (3) Control group (non-displaced workers) (4) t-test
Individual characteristics
 Primary education 0.16 0.16 −0.79 0.18 0.17 1.28
 Secondary education 0.56 0.55 1.80 0.65 0.66 −1.94
 Higher education 0.28 0.29 −1.07 0.17 0.17 0.73
 Age 39.8 39.8 0.08 38.6 38.6 −0.24
 Female 0.39 0.39 −1.57 0.35 0.35 0.40
 Married or cohabiting 0.52 0.53 −0.36 0.47 0.47 −0.40
 Children <7 years old 0.45 0.45 1.08 0.45 0.45 −0.47
 Home ownership 0.65 0.65 0.41 0.71 0.71 −0.49
 Have migrated before 0.22 0.23 −0.43 0.05 0.05 0.78
 Family member in region 0.30 0.30 −0.01 0.78 0.78 0.03
 Annual wages (in euros) 44,614 44,373 0.49 40,638 40,395 0.72
Moved to another region by b + 2 0.049 0.030 0.018 0.010
Number of observations 22,768 66,816 28,491 83,767

  1. Migration status is measured in b + 2 and other variables in b − 1. t-test statistics are for equal sample means between the treatment (displaced) and control (non-displaced) groups.

(Figure A1)

Figure A1: Travel-to-work areas, based on the 2019 classification.
Figure A1:

Travel-to-work areas, based on the 2019 classification.

Appendix B

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Received: 2023-06-16
Accepted: 2024-06-23
Published Online: 2024-07-15

© 2024 Walter de Gruyter GmbH, Berlin/Boston

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https://doi.org/10.1515/bejeap-2023-0207
Keywords for this article
birth region; establishment closure; family connections; job loss; migration

Articles in the same Issue

  1. Frontmatter
  2. Research Articles
  3. Asymmetric Performance Evaluation Under Quantity and Price Competition with Managerial Delegation
  4. Incentive-Induced Social Tie and Subsequent Altruism and Cooperation
  5. University Admission: Is Achievement a Sufficient Criterion?
  6. Taxing Firearms Like Alcohol or Tobacco
  7. The Growing Importance of Social Skills for Labor Market Outcomes Across Education Groups
  8. The Impact of the Affordable Care Act in Puerto Rico
  9. Strategic Individual Behaviors and the Efficient Vaccination Subsidy
  10. Is Family-Priority Rule the Right Path? An Experimental Study of the Chinese Organ Allocation System
  11. Letters
  12. Real-effort in the Multilevel Public Goods Game
  13. Initial Payment and Refunding Scheme for Climate Change Mitigation and Technological Development Among Heterogeneous Countries
  14. Edutainment and Dwelling-Related Assets in Poor Rural Areas of Peru
  15. Biased Voluntary Nutri-Score Labeling
  16. Decompositions of Inequality and Poverty by Income Source
  17. Job Loss and Migration: Do Family Connections Matter?
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