The paper is joint work by Kjell Salvanes, Jarle Møen and Kristiina Huttunen.

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Abstract

We study the migration behavior of displaced workers and find that job displacement increases regional mobility. We find, however, that non-economic factors such as family ties are very important for the migration decision, and that there is strong heterogeneity in outcomes. We find large income losses for workers who move to regions where they have family or to rural areas, while e.g. rural to urban movers realize a significant long-term increase in earnings. We also find that life events related to fertility, divorce and new relationships correlate with mobility after job loss and may partly explain the large income losses. 

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