Post-war International Labour Mobility: The Netherlands

Abstract

The standard neo-classical view of labour mobility is fairly straightforward. Labour will move from relatively depressed sectors and regions to sectors and regions that fare relatively well. At the level of individual labour supply, recognition of the separation in time of the cost of moving and the benefits leads to an investment framework (see e.g. Fields, 1979). Individuals move if they expect a positive return on their investment. They will forego expected future opportunities in their present situation, expend time and money in the move itself and hope to recover these costs from an improved position in the destination of their choice. The standard neo-classical theory predicts mobility if expected discounted benefits are positive. Usually, all kinds of frictions, such as informational, psychological and sociological barriers are incorporated in the analysis in terms of the exogenously given distance between origin and potential destination. If expectations are geared to the observations of current conditions, the theory predicts movement from areas with low wages and high unemployment to areas with relatively high wages and low unemployment. In this view labour mobility is a supply side phenomenon: it is the worker who takes the initiative.

Comments by participants in the Canterbury conference and by Professor Jan Pen are gratefully acknowledged.