The laws of attraction: Economic drivers of inter-regional mobility in selected OECD countries

The capacity of workers to move between regions in response to local economic shocks is one key dimension of labour market dynamism, which could contribute to the recovery from the pandemic and support necessary transformations underpinning the green transition. This chapter presents new empirical evidence on how policies shape the responsiveness of inter-regional migration to regional economic conditions, with a particular focus on housing markets, social policies and business regulations. The results suggest that inter-regional migrants move in search of higher income and better employment opportunities, but are discouraged by high housing costs. There is, however, large heterogeneity across countries in terms of what factors matter the most and in terms of the magnitude of the migration response. The chapter highlights the need for supplementing structural with place-based policies to help prospective movers as well as stayers.