Internal Migration of Natives and Immigrants Following Job Displacement

Abstract

In this paper discrete-time duration analysis is used to identify differences in the internal migration of immigrants and natives following job displacement. Human capital theory presents us with two hypotheses. One is based on immigrants having less location specific human capital, reducing the costs of migration and increasing the probability of migration. The other is based on ethnicity, immigrants living in ethnic enclaves will have higher costs to migration out of the enclave, due to the possibility of using country specific human capital within the enclave, reducing the probability of migration. The study is based on all displacements due to plant closure or major cutbacks in Swedish on-going establishments in 1987 and 1988. We follow residence up to 10 years after displacement and control for a wide range of human capital and family variables, as well as for labour market status and previous migratory behaviour. Findings support both of the hypotheses; settlement in enclaves does reduce geographical mobility for non-Nordic foreign born and foreign born are more mobile than native Swedes when enclaves and an extra effect on immigrants from living in a city have been controlled for.