The determinants of internal migration in Finland
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School of Business |
Master's thesis
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Authors
Date
2018
Department
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Mcode
Degree programme
Economics
Language
en
Pages
42
Series
Abstract
Many Finnish regions are slowly emptying, as their young working age populace leave their home municipalities and congregate in large cities to study or in the hopes of better career prospects. It is my purpose in this thesis to find out to what extent it is possible to predict which municipalities will be on the winning and which on the losing side of Finland’s internal migration flows in the future by looking at municipal characteristics such as average income, unemployment and population. Additionally I analyse how distance between municipalities is associated with the size of the migration flows between them. I use a logarithmic fixed effects regression model to analyse migration flows from 1996 to 2015, as well as from the periods of 1995-2005 and 2006-2015 separately. I find that the municipalities that experience a lot of in-migration over the period of 1995-2015 have high average education, low municipal tax rate, low unemployment, and high population, although the significance of education and unemployment has lowered over time. Additionally my results indicate foreigners and working age adults are more numerous in these municipalities, even more so during the later time period. Municipalities that experience a lot of out-migration have generally higher unemployment from 1995 to 2015, although the significance of this variable has lowered over time. Additionally my results indicate these areas have more foreigners and more working age adults, to a degree that from 1995 to 2015 areas with a high share of working age adults had lower net migration than otherwise similar areas with low share of working age adults. This has changed over time however, and my results predict that in the future municipalities with a high share of working age adults can be expected to have higher net migration. I find the overall ability of the municipal characteristics used in my model to predict net migration to be quite poor. The ability of these characteristics to predict in- and out-migration is somewhat better, with approximately 6 percent of variation in in-migration and 21 percent of variation in out-migration explained by the model. However, most of the predictive ability of the model on out-migration comes from the inclusion of population as a control variable, and should this variable be removed the predictive ability of the model regarding out-migration drops to a level similar that of in-migration. I find distance alone to be a very strong predictor of migration flows between two municipalities, with approximately 24 percent of variation between municipalities explained by this variable.Description
Thesis advisor
Bagues, ManuelKeywords
internal migration, gravity model, population centres, municipality characteristics