Ruhr Economic Papers

Ruhr Economic Papers #226

Testing the Neoclassical Migration Model: Overall and Age-Group Specific Results for German Regions

by Timo Mitze and Janina Reinkowski

RWI, RUB, 11/2010, 37 S./p., 8 Euro, ISBN 978-3-86788-258-3

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Abstract

This paper tests the empirical validity of the neoclassical migration model in predicting German internal migration flows. We estimate static and dynamic migration functions for 97 Spatial Planning Regions between 1996 and 2006 using key labor market signals including income and unemployment differences among a broader set of explanatory variables. Besides an aggregate specification we also estimate the model for agegroup related subsamples. Our results give empirical support for the main transmission channels identified by the neoclassical framework – both at the aggregate level as well as for age-group specific estimates. Thereby, the impact of labor market signals is tested to be of greatest magnitude for workforce relevant age-groups and especially young cohorts between 18 to 25 and 25 to 30 years. This latter result underlines the prominent role played by labor market conditions in determining internal migration rates of the working population in Germany.

JEL-Classification: R23, C31, C33

Keywords: German internal migration; Harris-Todaro Model; dynamic panel data

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