Can Migration Decisions Be Affected by Income Policy Interventions? Evidence from Finland

Abstract

Using Finnish micro-level data, this paper maps out whether migration decisions can be affected by income policy interventions. The analysis focuses on individuals living in peripheral regions and distinguishes peripheral migration from growth-centre migration. In support of the human capital hypothesis, the estimation results imply that migration decisions can be affected by income policy interventions. For example, an intervention that would increase an individual's expected disposable income by 10%, given that he/she does not move to a growth-centre region, would decrease his/her probability of growth-centre migration by approximately 12%. However, the impact appears to be modest compared, for example, with the impact of education on migration.