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Community attachment, job loss and regional labour mobility in Canada: Evidence from the Great Recession

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  • Derek Messacar

Abstract

Labour mobility is an important mechanism to equilibrate regional differences in labour market conditions. Yet, little is known about underlying differences between individuals that explain why some stay in place during times of economic hardship while others in objectively similar situations choose to leave. Using a novel dataset comprising 59,974 respondents of a national community health survey from Canada linked to their administrative tax records, this paper provides new insights into this important issue. Specifically, I investigate the extent to which individuals' objective and subjective ties to their local communities mitigate or exacerbate the decision to relocate following an exogenous job separation. To credibly identify this effect, I exploit variation in regional employment conditions over time caused by construction industry shocks during the Great Recession, based on an instrumental variables approach. The results indicate that job loss increases the likelihood of migrating within the same province by approximately 1.4 to 2.3 percentage points among men. Moreover, this effect is driven primarily by individuals with low sense of community belonging, which indicates “push and pull” between the need to relocate for work and the desire to stay near family and friends. Attachement communautaire, perte d'emploi et mobilité régionale de la main‐d'œuvre au Canada : données probantes tirées de la Grande Récession. La mobilité de la main‐d'œuvre est un mécanisme important pour équilibrer les différences régionales des conditions du marché du travail. Nous en savons toutefois très peu sur les différences sous‐jacentes entre les personnes permettant d'expliquer pourquoi certaines restent au même endroit pendant les périodes de difficultés économiques, tandis que d'autres choisissent de partir tout en étant dans une situation semblable d'un point de vue objectif. À l'aide d'un nouvel ensemble de données comptant 59 974 répondants de l'Enquête sur la santé dans les collectivités canadienne liés à leur dossier d'impôt administratif, cet article offre de nouvelles connaissances sur cette question cruciale. Plus précisément, j'enquête sur la mesure dans laquelle les liens objectifs et subjectifs d'une personne avec sa collectivité locale atténuent ou accentuent sa décision de déménager après une cessation d'emploi exogène. Afin de déterminer cet effet de façon crédible, j'analyse la variation dans les conditions de travail régionales au fil du temps causée par les chocs dans l'industrie de la construction pendant la Grande Récession, en fonction de la méthode de variables instrumentales. Les résultats indiquent que la perte d'emploi augmente la probabilité de migrer au sein de la même province d'environ 1,4 à 2,3 points de pourcentage chez les hommes. De plus, cet effet est stimulé principalement par les personnes éprouvant un faible sentiment d'appartenance à la collectivité, ce qui indique un tiraillement entre le besoin de déménager pour le travail et le désir de rester près de la famille et des amis.

Suggested Citation

  • Derek Messacar, 2022. "Community attachment, job loss and regional labour mobility in Canada: Evidence from the Great Recession," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(3), pages 1404-1430, August.
    • Handle: RePEc:wly:canjec:v:55:y:2022:i:3:p:1404-1430
    DOI: 10.1111/caje.12616
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