Unemployment, selective employment measures and inter-regional mobility of labour

Abstract.

This article examines the impact of selective employment measures on the subsequent migration behaviour of the participants. We hypothesise that employment measures targeted at high unemployment regions may discourage out-migration of the unemployed. Since the possible locking-in effect mainly influences those with the weakest employment prospects, selective employment measures may impede the adjustment process of regional labour markets. Results suggest that employment measures reduce the mobility of the unemployed, but only during an era of low unemployment when the employment prospects in potential destination regions are favourable. In an era of high unemployment, these measures are not likely to contribute to greater regional unemployment disparities. There is also large variation in the locking-in effects across different employment programmes and specific groups of job seekers.