Do People Follow Jobs of Do Jobs Follow People? : The Case of Finland in an International Context

Abstract

Traditionally, people are believed to follow jobs; however, a contradictory view that jobs follow people has also gained popularity. In this study, two methods are used to analyze regional growth processes in Finland between 1990 and 2010, and the results are compared with the findings obtained elsewhere. In accordance with the results from many countries, the conventional regional adjustment model shows that people have largely followed jobs in Finland, i.e., that regional growth is demand induced. A closer examination suggests, however, that highly educated people drive regional change in Finland and that economic fluctuations also have an effect. Another approach, based on the Granger causality method in a panel framework, reveals heterogeneity among regions, implying that regional growth is particularly supply induced for large and dynamic city regions. These results confirm expectations of complicated regional growth processes and the hypothesis that population and employment growth drive one another.