The effects of unemployment protection on migration in lagging regions

In this paper we analyze the unintended effects on mobility of a national place-based policy (SIPTEA) increasing unemployment protection in two lagging regions of southern Spain, namely, Extremadura and Andalucía. Using a border identification strategy and (1981 and 1991) census data at the municipal level, we estimate the effects of SIPTEA on population growth, the probability of staying and in-migration in rural areas that are experiencing high unemployment. The results indicate that the policy increased both the probability of staying and in-migration, although the locational inefficiencies implied are not particularly large.