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The impact of labor market freedom on state-level in-migration in the US: A dynamic panel data analysis, 2008-2016

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Abstract

Purpose Influences on the pattern of internal migration in the US, including economic factors, quality-of-life factors and public policy variables have been extensively studied by regional scientists since the early 1970s. Interestingly, a small number of studies also address the effects of economic freedom on migration. The purpose of this paper is to add to the migration literature by examining the impact of labor market freedom on both gross and net state in-migration over the study period 2008–2016. Design/methodology/approach This study uses dynamic panel data analysis to investigate the impact of labor market freedom on both gross and net state in-migration over the study period 2008–2016. Findings The panel generalized method of moments analysis reveals that overall labor market freedom exercised a positive and statistically significant impact on both measures of state in-migration over the study period. The study finds a 1 percentage point increase in the overall labor market freedom index results in a 2.8 percent increase in the gross in-migration rate. Research limitations/implications The findings imply states interested in attracting migrants and stimulating economic growth should pursue policies consistent with increased labor freedom. Originality/value The emphasis in the present study is on the impact of labor market freedom on state-level in-migration patterns, both gross and net, over a contemporary time period that includes both the Great Recession and subsequent recovering.

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