Labor market institutions and the efficiency of interregional migration: A Cross-Nation Comparison

An important question for economists concerns the effectiveness, or efficiency, of interregional migration as a labor market adjustment mechanism. We have considered the many dimensions of this issue in Chapter 1. Hoover and Giarratani (1984) suggest that this question of efficiency can be addressed at three different levels of inquiry by: (1) examining ratios of net to total gross flows of migrants between pairs of regions; (2) determining whether migrants benefit from their actions in terms of enhanced employment and/or income opportunity; and (3) assessing the contribution of interregional migration to aggregate output or, more broadly, to social welfare. Although a perfectly homogeneous labor force is required for (1) to assume economic meaning, and (3) is often considered unopera-tional due to the difficulty of measuring migration externalities, a number of recent studies have addressed the question of migration efficiency (directly and indirectly) along the lines of (2) above