Cities 130 (2022) 103850

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Mover stayer winner loser

A study of income effects from rural migration
Lina Bjerke *, Charlotta Mellander
Jönköping International Business School, Box 1026 551 11, Jönköping, Sweden

A R T I C L E I N F O A B S T R A C T

JEL classification: Rural-urban migration theory suggests that one gains economically by moving from a rural to an urban area. The
R23 popular juxtaposing notion is: “If you stay, you lose.” But given the rapid increase in housing costs in bigger
J1 cities, are losses from staying in rural areas still necessarily the rule? If so, how big is the economic loss for those
O18
who stay in rural regions? Using Swedish micro data, we focus on the income effects of rural-urban migration
Keywords: among young individuals. We find that staying in a rural region is negatively related to an individual’s income
Rural-urban youth migration
levels, but the loss is mostly insignificant. After controlling for housing costs, it is even beneficial for many people
Income
Mover
to stay in their rural areas, except for the most highly educated individuals who can benefit by moving to an
Stayer urban area.

1. Introduction research also highlights the greater diversity of consumer services,

“What if cities are no longer the land of opportunity for low-skilled
workers? Dense cities have long promised higher wages, but now
[this] is primarily true for workers with more education.” So stated a
recent New York Times article (Badger & Bui, 2019), which was based on
a presentation by M.I.T. economist David Autor. His point is well taken.
While urban areas have long experienced a large inflow of young, skilled
individuals, rural areas have often been ‘left behind’ (Rodríguez-Pose,
2018). As far back as Marshall (1890), both theory and practice have
shown how agglomeration effects from larger labor markets provide
higher wages. This wage premium has been a good reason for many to
move to larger cities for a long time. The result for many rural areas has
been a depopulation of the educated, leaving an increased share of
elderly and a less skilled labor force. This work contributes to this field
of research by asking the question whether the wage premium from
larger cities still is high enough to cover the extra cost for housing.
Further, do the wage benefits differ depending on the level of education?
Our study positions the paper in a growing literature that has begun to
question the conventional wisdom of whether moving up the
geographical hierarchy is a generic solution to better income.
Human capital theories suggest that highly skilled workers are more
likely to move than low skilled. The former benefit from larger relative
wage differences across regions and have potentially more to gain from
migrating (e.g. Mincer, 1977; Nakosteen & Zimmer, 1980). More recent
culture, and other experiences that create additional influential factors
prompting young adults to move from rural to urban areas (Florida,
2002; Glaeser et al., 2001). Current studies equally identify the role of
economic and social gains in rural-urban migration, though they are
based mostly on data in developing countries (e.g. Glaeser & Kohlhase,
2003; Lucas and Robert, 2004) or using a historical perspective of the
data among Western nations (Gollin et al., 2016). Other empirical
studies on the financial gains of rural-urban migration focus on other
contexts as well, but what seems to be consistently significant in the
more developed parts of the world are the labor market benefits to be
gained (Hansen & Niedomysl, 2009; Storper & Scott, 2009).
However, these gains are often moderated by housing costs. Several
recent studies have examined the strong effects that migration into
attractive urban areas has had on housing costs and the competitive
dynamics of the housing market. Edlund et al. (2015) show how demand
for centrality and reduced tolerance for commuting have been drivers of
increased urban housing values since the 1980s. Glaeser et al. (2001)
argue that urban rents have increased faster than wage levels. In the
most attractive urban areas, rising housing values have vastly outpaced
national averages (Gyourko et al., 2013). Even if wage levels are
significantly higher, far from everyone earns enough to cover the extra
housing costs of living in a big city (Florida, 2017).
In light of these trends, the migration patterns of young and highly
skilled individuals have stirred up an intense debate in Sweden. Some

* Corresponding author.
E-mail addresses: lina.bjerke@ju.se (L. Bjerke), charlotta.mellander@ju.se (C. Mellander).

https://doi.org/10.1016/j.cities.2022.103850
Received 15 December 2020; Received in revised form 10 June 2022; Accepted 24 June 2022
Available online 13 July 2022
0264-2751/© 2022 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
L. Bjerke and C. Mellander
claim that individuals are motivated to leave rural areas due to a
decreased supply of services affecting their quality of life (Swedish
Government, 2015). Rural interest organizations have suggested that
young people flee from rural areas based less on better economic op­
portunities in cities than on a cultural notion that staying in rural areas
makes them feel like “losers” by not moving. In this view, the perceived
gains reaped from the rural-urban move are partly constructed from a
questionable, but widespread “urban norm structure” (Rönnblom, 2014;
Stenbacka, 2011). On the other hand, a more recent study suggests that
not all rural regions can be bundled together as losing propositions; in
fact, some are well-equipped for positive economic development and
innovation that could entice youth to stay home (Rodríguez-Pose and
Wilkie, 2019).
The purpose of this paper is to identify the real extent of income gains
if one decides to move from a rural area or not. The conventional truth
has been that bigger cities pay better due to agglomeration effects
(Glaeser, 1999; Rauch, 1993) and that the resulting higher wages are a
migration pull factor. We aim to contribute to this field of research by
answering two questions: Do bigger cities pay better to the extent that it
covers the extra housing costs, and do they do so for everyone?
To do the study, we use Swedish microdata to track all individuals
with a rural residential location at the age of 20. We follow them to the
age of 30 and identify their residential location and their incomes while
controlling for regional and individual characteristics. With this data,
we examine if it really pays off financially for young people to move from
a rural to an urban region, or if cities are no longer the land of oppor­
tunity for everybody.
2. Literature review
The migration literature has a long history and stretches over many
disciplines, indicating that the causes and effects of people changing
residential locations can be looked at from many angles. One primary
cause of relocation stems from advantages related to an upwards move
in the geographical hierarchy (Jacobs, 1969; Marshall, 1890).
Theory suggests that people relocate when another location better
satisfies their financial needs and that there is a direct connection be­
tween incomes and migration decisions (Sjaastad, 1962). A vast amount
of literature also shows how wages increase with population size and
density, due to agglomeration effects (Glaeser, 1999; Glaeser et al.,
1995; Glaeser & Mare, 2001; Rauch, 1993) which in turn can function as
a migration pull factor. These effects increase the economic divide be­
tween urban and rural areas, which has been occurring for decades.
2.1. The urban-rural divide and the factors of migration
Urban areas have grown substantially in population by attracting
young, highly educated people, mostly due to strong labor markets,
better educational opportunities, and a more diverse set of lifestyles.
Rural areas, on the other hand, have generally experienced a loss of
young people over time, resulting in several knock-on economic and
demographic consequences for them. As their population size decreases,
so have their public service offerings and other consumer amenities. This
multi-faceted downward slide makes remaining in rural regions even
less attractive, especially for younger individuals.
The rural-urban migration is almost entirely among younger adults.
A study from Bjerke and Mellander (2016) illustrates how almost 90 %
of moves across municipal borders are made by individuals between 18
and 35. Most of these shifts are from smaller, less dense to bigger, more
dense regions. Another study confirmed that only 15 % of Swedish
municipalities had more 25-year-olds in the year 2012 than they had 18-
year-olds seven years earlier (Mellander, 2013). This demonstrates that
the locational preferences of the younger generation very much deter­
mine population growth or decline.
Besides wage differentials, differences in amenities also weigh in the
migration decision. Roback (1982) suggests that all factors must be
2
Cities 130 (2022) 103850
considered to understand migration patterns. For example, the rural lack
of amenities may be compensated by higher wage levels for some
workers who remain at home, influencing their decision not to migrate.
This correlation is partially found in Swedish relocation conditions
(Backman & Bjerke, 2014).
The problem is that migration patterns based on just these factors are
inconsistent, as there are also alternative reasons behind the choice to
migrate or not. This was observed decades ago, starting with Lowry’s
(1966) gravity migration study, which showed that economic conditions
in the origin region do not affect migration decisions. These results were
confirmed by Rabinski (1970) and also more recently by Schleicher
(2017). In fact, numerous studies on US conditions examine the pull of
natural amenities to explain migration patterns into rural areas. Vias
(2012) notes that some micropolitan areas offer a small-town lifestyle
but still with commuting access to city amenities. This is also in line with
McGranahan and Wojan (2007) who show how natural amenities
explain migration patterns to rural parts of the US. Partridge et al.
(2010) find support for individuals who move to rural areas for better
quality-of-life reasons, though they also agree that migration equally
could be caused by monetary factors. Studies on counter-urbanization in
Sweden also recognize this quality-of-life effect, where career and
earnings are of minor importance for some (Lundgren, 2003).
Introducing yet another factor in the choice to migrate, a recent
stream of Swedish studies (Rönnblom, 2014; Svensson, 2006) perceive
migration as a function of social pressure. These suggest that young
people’s migration from rural areas is driven by an “urban norm” rather
than by economic incentives. By portraying cities as places of success,
rural areas are indirectly thought of as less advantageous. This may
affect young individuals, particularly those in rural areas who might
relocate so as not to be perceived as being “losers.” Currently, this
research is primarily based on case studies of specific locations. For
example, in one study of a rural region in Sweden, Svensson (2006)
shows that only about 30 % of the young stayers thought local policy­
makers considered them to be an asset. Among the young movers from
this area, nearly 70 % said they would be considered a local asset if they
moved back home after their urban experiences. In other words, stayers
perceived themselves as less valuable than movers.
Mover-Stayer models (Blumen, 1955) propose that certain groups
are more likely to move, such as the young and the highly educated, who
have far more to gain from relocating. They have larger incentives in
terms of higher wages and optimized value in a tight labor market
(Schwartz, 1976). Migration can also be seen as a path trajectory, such
as an individual who decides to move to an urban area to attain higher
education, and thereafter is reluctant to move back again (Faggian et al.,
2007a; Faggian & McCann, 2009; Schwartz, 1976).
Factors such as marital status (Graves & Linneman, 1979), age
(Pandit, 1997), and gender (Faggian et al., 2007b) can also play a role.
Using Swedish data, Bjerke and Mellander (2016) show that mobility
peaks around the age of 25 and that the likelihood to move drops sharply
after 35. These older stayers may have developed more location-specific
advantages related to personal networks, social capital, labor market,
and infrastructure – assets that would lose much of their value in
relocation.
2.2. Costs of housing
The vast inflow of individuals in bigger cities did not have the same
response in housing supply, which in turn led to a rapid increase in
housing costs in many of those places (Glaeser, 2008; Gyourko et al.,
2013). In a more general context, previous studies show that housing
costs could have a negative impact and dampen the in-migration to high-
cost areas (Cameron and Muellbauer, 1998; Plane et al., 2005; Buzar
et al., 2007; Berger & Blomquist, 1992). On the other hand, others
suggest that in-migration can be positively related to increasing housing
prices (e.g Bitter & Plane, 2012; Graves, 1983; Roy & Flood, 1992).
Stawarz et al. (2021) build on the former literature and their results
L. Bjerke and C. Mellander
suggest that with increasing housing costs (rents), a decline in residen­
tial inflows follows. They further show that this effect is strongest on the
intensity of migration for the age groups of 18 to 24 and 30 to 49, times
when individuals either migrate for university studies or begin to settle
down.
Foulkes and Schafft (2010) further examine the role of financial
means on migration and show how low income individuals are as in­
clined to migrate long distances as their richer counterparts – contra­
dicting the human capital theory. However, attracted by more
affordable housing, their target destination is often another poor area,
which in turn increases poverty rates there. In developed nations,
housing cost is especially an important factor. Differences in housing
values across regions can hinder migration, mostly in rural-to-urban
directions. Regions with higher housing demand have stronger real es­
tate markets, which means that movements from rural areas to urban
areas are hampered foremost by access to capital (Bover et al., 1989).
The rapid increase in housing values in urban areas (e.g Gyourko et al.,
2013; Florida, 2017) may imply that a relatively higher wage level still
does not cover the extra costs of housing.
Taken together, however, much of the current research suggests that
there is indeed a positive financial reward from upwards migration in
the urban hierarchy. Bigger cities offer higher wages due to agglomer­
ation effects. This research has a long history and there are relatively few
alternative hypotheses. Nevertheless, with the rapid increase in housing
costs in bigger cities, we argue that the extra wage premium from big
city labor markets might no longer be enough to cover the extra rent.
This gap between wages and rent can potentially become a divider be­
tween those winning and those losing when moving to bigger cities. It
raises a key question in the current rural-urban migration debate: Is the
wage premium in bigger cities big enough to cover their extra housing
cost, and is it true for everyone? The answer to the question positions
this paper at the tipping point between the long-prevailing literature on
agglomeration forces pulling people towards dense areas, and the new
stream of literature suggesting that cities are no longer the land of op­
portunity. The paper thus adds an important rural-urban perspective to
the literature on housing and internal migration.
3. Methodology
In the remaining part of the paper, we examine to what extent the
locational choices of young rural individuals influence their income. The
hypothesis tested concerns whether staying in a rural region is an
economically winning or losing choice for young adults, once other in­
dividuals and regional factors have been controlled for. We consider
whether individuals decide to 1) move away from their home rural re­
gion, 2) move and come back to it, or 3) not move at all.1
3.1. Data and background
We employ register micro data from Statistics Sweden. The data
contain information about all individuals in Sweden, such as residence
location, gender, age, educational length, working profession, civil
status (single or not), and more.
The analysis first tracks all individuals who were 20 years old in the
year 2005. This age is the starting point of what could be described as
the most significant migration wave. Fig. 1 illustrates the overall
migration frequency across municipal borders and the age when these
moves take place. Three peaks are noted, two smaller and one larger.
The first peak represents children moving with their parents, and the
third peak is those moving around retirement age. The largest peak,
however, occurs between 20 and 35 years old. It starts to rise just after
finishing high school, and increases to the age of 25, then drops sharply
around ages 30 to 35. Educational opportunities motivate a major part
1
Fig. A1 shows the distribution of rural and urban regions in Sweden.
3
Cities 130 (2022) 103850
of these moves, but also labor market conditions and other lifestyle-
related factors such as family compositions (e.g. Bjerke & Mellander,
2016).
There are 290 municipalities in Sweden, characterized as rural or
urban.2 The data do not contain information about an individual’s birth
region. As a proxy for “home region,” we use the residential region at the
age of 18, i.e., one year before most youth finish high school. If it is a
rural municipality, the individual has a “rural origin.” This timing may
be an even better proxy for the home region than the actual birth region,
since the parents may have relocated over time. Only those 20-year-olds
with a rural home region are selected in the analysis and they are 28,604
in number, with slightly more men (M) than women (W).
We then study these individuals ten years later at age 30, mapping
where they live and their income as well as other personal characteris­
tics. Fig. 2 breaks down the locational choices of these individuals,
reflecting migration or not.
At 30 years old, we see that 11,583 have moved away from their
home region, while 12,845 still (or again) live in their “home region.”
Out of the 12,845 individuals who still live in the same region in 2015,
the data show that more than 7 out of 10 never lived in another region
during the studied period, while the remaining 3 out of 10 moved but
returned home. The term “Same LLM” (local labor market) refers to
4176 individuals who moved out of their home region but at age 30 live
geographically close enough for it to be in the same LLM.
The second set of boxes in Fig. 2 shows gender differences for each
locational choice. The largest difference appears in the category of those
still living in their home region when they are 30 years old. Men are in
majority, which is in line with previous literature showing that more
women than men move to urban areas (Edlund, 2005).
The bottom set of boxes in Fig. 2 illustrates educational attainment
(minimum 3 years of university education for a BA or above). Only about
15 % of those in their home region at age 30 have a higher education.
The corresponding number for those with higher education not living in
their home region is about 44 %, almost three times as many as those
who stayed in their home region. About 26 % of those living in the same
LLM, but not in the same municipality, have a higher education. Overall,
women have higher education. The largest difference in educational
attainment appears among those staying in their rural home region in
2015, where about 85 % do not have higher education. These descriptive
results are possibly explained by results from several research reports (e.
g., Lovén, 2016) that suggest that people who acquire a higher education
have a generally higher tendency to move away from rural areas.
However, comparing men and women, women are in general more
educated (on a municipal level) but comparing all who study, men are
more apt to move away than are women.
3.2. Rural movers vs. rural stayers
As stated, we identify individuals who at the age of 20 (the year
2005) lived in a rural area and thereafter we examine their income level
10 years later. We aim to capture them at a stage in life when they tend
to have decided on a more permanent residential location. We estimate
the regression as a linear cross-sectional model:
Y = Incomei = β1 Same residential municipalityi + β2 Same residential LLM i
+ β3 House pricei + [Individual characteristicsi ]ˊ β4
+ [Regional characteristicsr ]ˊ β5
(1)
The dependent variable, Y (ln) is a compound measure of gross
wages from employment and/or net income from self-employment in
the year 2015. Self-employment can be a necessity and may especially
2
Categorization according to The Swedish Agency for Growth Policy Analysis
(2015).
L. Bjerke and C. Mellander Cities 130 (2022) 103850

Fig. 1. Interregional migration for all ages of individuals in Sweden 2015 (Bjerke & Mellander, 2016).

Fig. 2. Locational and educational choices of rural origin individuals in 2003.

be true for some in rural areas, being located farther away from larger
labor markets.3 We do not separate employment and self-employment
incomes since we are interested in total monetary gain.
Since urban regions generally have higher costs of living, we also
take into account housing costs. Price dynamics in the housing market
are highly related to population density. Prices tend to vary with in­
comes in the long run but are also short-term influenced by supply and
3
Self-employed in areas with such challenges tend not to be significantly
further job-creating (Stockdale, 2006).
demand. Hort (1998) shows this for the Swedish housing market. This
leads us to assume that housing costs affect the migration decision,
though indirectly through the relationship between incomes and hous­
ing costs. We try to capture this indirect relationship in a two-step-
model. We build our dependent variable by estimating incomes as a
function of regional average house costs (house pricei) and create the
vector of fitted values, Y
̂ . So, in the main empirical model, we use the
dependent variable Y
̂ as the (orthogonal) projection of Y onto the space
of average housing costs.

4
L. Bjerke and C. Mellander
̂ = β1 Same residential municipalityi + β2 Same residential LLM i
Y markets (Johansson et al., 2003).4
(2)
+ [Individual characteristicsi ]ˊ β3 + [Regional characteristicsr ]ˊ β4
Fig. 3 illustrates average regional income levels (to the left) as well as
the dependent variable Y. ̂ Starting with Y,
̂ the white and the patterned
municipalities are those with negative values whereas those in shades of
grey have positive values. The latter appears within and around larger
cities. Income levels mirror this pattern, also related to population
density and/or strong labor markets.
3.2.1. Independent variables
Details on definitions and source of data are provided in Appendix C.
Below follow the general descriptions and motivations.
Local residence at the age of 30: This captures whether an individual
resides in his or her rural home municipality at the age of 30 years old, or
if he or she resides somewhere else.
Regional residence at the age of 30: This indicates whether an indi­
vidual lives in his or her home labor market region (LLM), but not in
their home municipality. In effect, these people live close to home or in
reasonable reach of it, but not exactly in the same municipality that they
started from. Some of the attraction of remaining in the home region are
familiar factors, such as old networks and family ties, sometimes called
family motivation of migration (Mitchell, 2004).
Migration frequency: As an attempt to see whether migration patterns
affect income, this captures the number of times the individual changed
his or her residential municipality during the ten-year period. Kennan
and Walker (2011) show that migration decisions are highly driven by
income prospects, which means that repeated previous migration could
have influenced income up or down. We add the effect of this potentially
not being a linear relationship, with a negative effect on too many moves
between different locations.
Beyond this, the data reveal gender (man = 1), civil status (in a
relationship = 1), background (foreign-born = 1), educational length
(higher education = 1), and labor market experience. Civil status is
included since being single can decrease transaction costs of moving and
may thereby indirectly affect income. Higher education reflects whether
the individual has a university education equal to or longer than three
years. We assume this affects migration patterns in Sweden (Bjerke &
Mellander, 2016). Labor market experience captures the number of
employment years between 20 and 30 years old.
Regional characteristics: The main regional character is average
housing costs (proxied by the housing values expressed in SEK) in the
residential municipality. A vast part of the housing literature argues
there is a cointegrated relationship between housing costs and incomes.
There is also some relationship between disposable incomes and housing
costs trends, but the cause and effect are not easy to disentangle (Gallin,
2006; Geng, 2018).
We also control for other factors related to one’s regional location at
the age of 30. We assume that incomes could be affected by the industry
structure at the location, primarily since the demand for educated labor
varies, but also because wage levels vary across industries due to other
external factors, such as consumer demand and global competition.
Given this background, we include shares of employees within the
manufacturing, agriculture, mining, and hospitality sectors, respec­
tively. Rural industry structures are primarily dominated by these sec­
tors (see Fig. A2). Income varies vastly even across rural areas, but the
agriculture, mining, and hospitality sectors are significant ones in the
labor market in the northern parts of Sweden. The south is also char­
acterized by rural areas, but there manufacturing is the dominating
sector. We also control for the creative, knowledge-based sector, which
has primarily urban locations. A measure of accessibility to population is
also added to the empirical model to capture access to thicker labor
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Cities 130 (2022) 103850
3.3. Findings
We now turn to the results of the analysis of income effects of in­
dividuals staying in their rural region versus moving away from it.
Standardized and unstandardized coefficients are presented to get
around the different units of our predictors. Five models were run: the
first three use income (in logged form) as the dependent variable. Model
1 (Eq. (1)) is the base model and is followed by Models 2 and 3 that
control for the effects of access to denser, urban areas – one based on
access to thicker labor markets (Model 2) and one based on housing costs
(Model 3). Models 2 and 3 intend to capture the individual’s ability to
commute to work from a rural location into a denser area. From previous
research, we also know that such accessibility is a proxy for other labor
market characteristics, e.g., urban-related industries (see, for example,
Andersson & Karlsson, 2007). The high interrelation between popula­
tion density and housing costs (a Pearson bivariate correlation coeffi­
cient of 0.86) leads to multicollinearity issues when combined in the
same model and is therefore used separately in Models 2 and 3,
respectively. The last two Models (4 and 5) still employ income as the
dependent variable, but this time after controlling for regional housing
costs (Eq. 2). Table 2 illustrates the results:
3.4. Focus variables - locational choice
We start with Model 1 and the relation between income and loca­
tional choice. Our two focus variables are binary and take the value 1 if
after ten years the individual is (i) residing in their home rural munic­
ipality, or (ii) in another municipality located within the same LLM. We
find a significant negative effect from staying in the local rural home
municipality, i.e., a rural wage loss, compared to those people who left
their rural region to reside somewhere else. However, the impact of
staying in another municipality still within their home LLM is not
significantly related to the individual’s current income level.5
In Model 2, we control for accessibility to a bigger labor market.
When this is accounted for, neither of our locational choice focus vari­
ables becomes significant. The intuitive explanation for this is that if the
rural home municipality is within a large labor market within a
reasonable commuting distance, then the rurality does not affect the
individual’s income level. In other words, the “rurality” is now of minor
importance in finding labor market opportunities, though in terms of an
individual’s locational choice, it can matter for other reasons. Rural
regions on the outskirts of larger metropolitan regions have an in-to-out-
commuter ratio6 way below 1, which means that they are less dependent
on their own labor market than a region in less dense areas with lower
accessibility. This seems to be specifically true for individuals with
university degrees, since the interaction variable “long edu-stay” now
becomes significant only at the 10 % level (compared to 1 % in Model 1).
In Model 3, we remove the accessibility measure and examine the
more direct reflection of the housing market in the specific municipality.
In this version, the income effect from staying is insignificant. The re­
sults are consistent, but the interaction between staying and having a
higher education is now completely insignificant.
We now move on to Models 4 and 5, where we change the dependent
variable from total income to the income-housing residual (Eq. (2)),
which is the individual’s income given the municipal housing costs. This
dependent variable is, in other words, the residual from a regression
where the individual income is explained by housing values.
4
See the Appendix B for accessibility calculations.
5
All models have been estimated controlling for whether the move is to
another rural municipality. This variable is robust and follows the results of
staying. So, moving to another rural place has the same effect as staying.
6
SOU 2017:01.
L. Bjerke and C. Mellander
Fig. 3. Average Incomes and Estimated Incomes when Housing Values have been controlled for; To the left: Unstandardized residuals, used as the dependent variable
in Model 4 and Model 5. To the right: Average income 2015.
Starting with Model 4 (without accessibility), we see that staying in
the rural home region is now positively related to income, given house
costs. It seems that lower income levels resulting from staying in the
rural home region (shown in the earlier models) can be compensated for
through lower housing costs. However, as in Models 1, 2 and 3, we only
get these significant results from the locational choice when individuals
decide to be in their same local rural home municipality. The choice of
staying within the same LLM but in another municipality than their
origin is not significantly related to income given the housing costs. In
Model 5, with accessibility, the effect from staying decreases in
magnitude compared to the result in Model 4. This suggests that
accessibility to a larger market could compensate for the negative effect
related to income.
Our variable on migration frequency captures residential mobility
and the extent to which it relates to an individual’s income. In our result,
higher mobility is negatively related to income. This is not in line with
previous literature on job mobility where mobility is shown to be posi­
tively related to upward career movements. However, our focus is on
residential migration rather than a job change, though these are some­
times but not always intertwined with each other. Our result may be
explained by the fact that mobility due to job change in Sweden is
infrequent. Going back to Table 1, we can see that the residential
mobility rate is relatively low, with an average just above one move for
this specific ten-year cycle. Some individuals may move for their studies
but thereafter settle down quickly. There is a decreasing mobility trend
in Sweden, as in many countries, which is often regarded as an
increasing problem for labor market dynamics (Fischer & Malmberg,
2001). People can be tied to a place for reasons beyond a job, and once
6
Cities 130 (2022) 103850
settled, may be reluctant to move. This implies that being rooted in one
place is not the equivalent of being stuck (Florida, 2008). It may explain
the negative figure of mobility rate in the model, even though the in­
come effect is negative.
3.5. Individual characteristics
The individual characteristics variables we studied are consistent
across all five model permutations. Starting with gender, men have
higher income, and looking at the standardized coefficients, gender has
a relatively high impact on income. In Fig. 2, we noted that there are
significant differences between the migration patterns for men and
women, but the difference is foremost related to educational levels. In
general, women are more educated than men and gender differences in
income seem to be even larger when focusing on those staying in the
home region. Out of those highly educated who decide to stay, about
70 % are women. The estimated positive effect on the income of being a
man may therefore reflect regional structures rather than being an ed­
ucation premium. These structures may be related to labor market dif­
ferences and the fact that agriculture, mining, and manufacturing in
many rural regions suffer from low diversity and are dominated by men.
(Bjerke et al., 2014).
As an extension of these gender differences, Table 3 illustrates the
employment distribution of women and men in rural areas. The table
shows the six largest industries for men and women, respectively. For
women, these six industries accumulate to a bit more than 64 % of all
women employed. For men, the top industries only employ a bit more
than 36 %. Women are concentrated in just a few industries, mostly in
L. Bjerke and C. Mellander Cities 130 (2022) 103850

Table 1
Descriptive statistics (for variables descriptives, see Appendix C).
Variables Mean Std. dev Min Max

Dependent variables
Income 2478 1547 0.1a 16,630
6
Income - Housing cost residual − 1.23 e− 1538 − 11,348 13,959
Locational choice variables
Same residential municipality at the age of 30 (1 if same municipality) as at the age of 18 0.45 0.50 0 1
Same residential LLM at the age of 30 (1 if LLM, but not municipality) as at the age of 18 0.15 0.35 0 1
Migration frequency 1.33 1.40 0 10
Individual characteristics
Gender 0.52 0.50 0 1
Married 0.49 0.50 0 1
Experience 9.60 2.55 0 10
College Grad 0.28 0.45 0 1
Foreign-Born 0.06 0.23 0 1
Regional characteristics
Housing costs 2372 1742 307 10,182
Manufacturing 0.13 0.33 0 1
Agriculture 0.02 0.13 0 1
Mining 0.00 0.07 0 1
Hospitality 0.03 0.16 0 1
Creative 0.07 0.26 0 1
Accessibility 210,414 274,099 3084 994,733
N = 28,604
a
Those with negative or zero income has been assigned a value of 0.1. These are 8.7 % of the observations. Controls for the robustness of this data modification show
no major changes in results, either by removing them or adding a dummy.

the public sector. The third and sixth columns illustrate the average
income in these industries. The columns to the right of these show the
distance from the mean values of incomes in the group. About 13.7 % of
women in rural areas are employed in the industry of residential care and
activities. They have an average yearly income of 192,200 SEK, which is
about 8 % lower than the average income of all women in rural areas.
Turning to the right side of the table, it shows how men have higher
income but also how the “most popular” industries pay off. About 12.7 %
of men are employed in the industry of specialized construction activities.
They have an average income of 312,500 SEK which is nearly 6 % higher
than the average income of men in rural areas. All in all, the estimation
results on gender presented in Table 2 are all expected, given the
occupational and income structures presented in Table 3.
Turning our focus to Table 2 again, being married is negatively
related to income. Our individuals are 30 years old, which is just above
the age when women on average give birth to their first child, but there
is a relatively large regional variation. The oldest first-time parents are
to be found in the largest cities (average age of 32.1 for mothers and 34.3
for fathers) while the youngest first-time parents live in rural areas
(average age of 25.2 for mothers and 28.2 for fathers).7 Marriage is by no
means a precondition to having children but studies show that the
transition to being a parent is highly correlated to also being in some
union (cohabitation or marriage) and that this is relatively high in
Sweden (Baizán et al., 2004).
Labor market experience and university education are both positive
and highly significant. Looking at the standardized coefficients, labor
market experience outperforms higher education in terms of the
magnitude of effects. This may have several explanations; one may be
the low educational premium in Sweden for a university degree, which
is, in fact, the lowest in OECD.8 Accumulated life income may therefore
be higher for those starting work immediately after high school. This
may be expected specifically in a thinner labor market where matching
between labor supply and labor demand is less efficient than in denser
areas (Duranton and Puga, 2004). This is also supported by the inter­
action variable from Table 2 above that combines the effect of higher
education with also staying in their rural home region. This relation is
negative, which suggests that staying when one also has a higher
education is a monetary loss. However, adding it does not drastically
change the remaining variables. Having an immigrant background is
also not significant in this model set-up.
Individual characteristics are similarly related to the dependent
variables in all permutations of the model, with the statistically rela­
tively weak exception of having an immigrant background. It is negative
and significant on our income-housing cost residual. One needs to
emphasize that accessibility itself is now negative in this model. A
location with high accessibility implies higher income but this also
drives up housing prices in the area.
3.6. Regional characteristics variables
The results for regional industrial structure are consistent across
models, with a few exceptions. One of these is that the relatively strong
result for agricultural sector employment is only significant in Models
1–3, while being insignificant in relation to the housing cost residual.
The mining employment variable is consistently strong and positive and
indicates that in municipalities where this sector is strong, wages are
higher; in fact, high enough to cover the possible extra cost of housing.
As opposed to the mining industry, the income impact in a region
with a relatively large share of employees within the hospitality sector is
only positive and significant if housing values are not accounted for. The
coefficients are negative and significant when housing relative incomes
are used as a dependent variable. This suggests that rural areas that
create job opportunities provide higher wages, but these higher wages
do not cover the extra cost of housing that tourism brings.
Being in a municipality with a larger share of employees in the
manufacturing sector is positive for income, even when housing values
are considered. This suggests that a strong manufacturing industry pays
relatively well, but the same municipalities may be less attractive places
to live in given their relatively low levels of housing values. While the
creative sector is more dominant in urban regions, the results suggest
that having more employees in this sector is positively related to in­
comes also in rural areas.
4. Summary and concluding discussion

7
Source: Statistics Sweden. The starting point of this paper was the question of whether cities are
8
Education at a glance 2017 - OECD indicators. still the land of opportunity and if the wage premium from bigger cities

7
L. Bjerke and C. Mellander Cities 130 (2022) 103850

Table 2
Regression results, unstandardized β-coefficients, t-statistics in italics and standardized β-coefficients in bold.
Dependent variable: Dependent variable:
Total income (ln) 2015 Housing cost residual

Model 1 Model 2 Model 3 Model 4 Model 5

Focus variables -Locational Choice

Same municipality − 0.14*** − 0.04 − 0.01 126.26*** 71.27***
(− 3.54) (− 0.86) (− 0.30) (5.71) (3.00)
− 0.023 − 0.006 − 0.002 0.041 0.023
Same LLM − 0.02 1.68e− 3 0.02 23.96 13.23
(− 0.52) (− 0.04) (0.46) (1.02) (0.56)
− 0.002 − 0.002 0.002 0.006 0.003
Migration freq. − 0.10*** − 0.11*** − 0.10*** − 42.29*** − 39.00***
(− 3.65) (− 3.87) (− 3.87) (− 2.74) (− 2.53)
¡0.023 ¡0.050 ¡0.049 ¡0.038 ¡0.035
(Migration freq.)2 0.008 0.01 0.01 − 2.75 − 2.94
(1.42) (1.49) (1.38) (− 0.86) (− 0.92)
0.017 0.018 0.016 ¡0.011 ¡0.012
Individual characteristics
Gender 0.63*** 0.62*** 0.62*** 889.32*** 891.00***
(22.28) (22.18) (22.10) 0.105 (55.59) (55.72)
0.106 0.106 0.289 0.289
Married − 0.19*** − 0.17*** − 0.16*** − 286.23*** − 294.62***
(− 6.86) (− 6.27) (− 5.81) (− 18.37) (− 18.86)
¡0.032 -0.029 ¡0.027 ¡0.093 -0.096
LM experience 0.71*** 0.71*** 0.71*** 238.35*** 239.14***
(131.01) (130.74) (130.56) 0.611 (77.45) (77.69)
0.613 0.612 0.395 0.396
Long education 0.52*** 0.48*** 0.46*** 393.26*** 416.39***
(13.41) (12.15) (11.69) 0.070 (17.77) (18.57)
0.079 0.073 0.115 0.122
Immigration background 0.06 0.04 0.04 − 57.12* − 44.99
(1.12) (0.73) (0.76) (1.75) (1.38)
0.005 0.003 0.003 ¡0.009 ¡0.007
Interaction: Longedu*stay − 0.17*** − 0.12* − 0.11 − 99.65*** − 123.61***
(− 2.46) (− 1.81) (− 1.53) (− 2.55) (− 3.15)
¡0.014 ¡0.010 ¡0.009 ¡0.016 ¡0.020
Regional characteristics
Housing cost 8.24e-5***
(8.63)
0.049
Manufacture 0.49*** 0.50*** 0.52*** 385.47*** 379.68***
(11.68) (11.93) (12.30) 0.058 (16.05) (15.81)
0.055 0.057 0.083 0.082
Agriculture 1.10*** 1.13*** 1.13*** 48.32 31.75
(10.53) (10.82) (10.88) 0.050 (0.81) (0.54)
0.048 0.049 0.004 0.003
Mining 0.66*** 0.75*** 0.69*** 1195.59*** 1145.70***
(3.32) (3.78) (3.48) (10.63) (10.17)
0.015 0.017 0.016 0.053 0.005
Hospitality 0.60*** 0.60*** 0.59*** − 240.55*** − 241.11***
(7.16) (7.18) (7.00) (− 5.03) (− 5.04)
0.033 0.033 0.032 ¡0.025 ¡0.025
Creative 0.49*** 0.47*** 0.46*** 617.80*** 626.13***
(9.12) (8.83) (8.69) (20.32) (20.59)
0.043 0.042 0.041 0.105 0.106
Accessibility 0.10*** − 52.15***
(6.58) a (− 6.28)
0.037 0.039
Constant − 0.37*** − 1.51*** − 0.60*** − 2798.10*** 2180.82***
(− 5.70) (− 8.17) (− 8.50) (− 75.58) (− 20.76)
Adj R2 0.415 0.415 0.416 0.304 0.305
N = 28,604

Accessibility and housing costs are highly correlated (0.86) and are therefore used separately.

is big enough to cover the extra housing cost? Much research has shown
that bigger cities pay higher wages, which in turn would act as a
migration pull factor. But at the same time, bigger cities have become
expensive to live in, and it may be the case that the extra wage premium
from the agglomeration effects may not be enough to cover the extra cost
of housing – at least not for everybody. This work thereby positions itself
in the intersection point between the extensive literature on agglomer­
ation forces—stronger labor markets and wage premiums on one
hand—and a newer stream of literature suggesting that cities are no
longer is the land of opportunity, at least not for everybody. Our paper
contributes by examining the income effect based on the choice of
staying or moving away from the home rural region, both with and

8
L. Bjerke and C. Mellander Cities 130 (2022) 103850

Table 3
Distribution of employment, the average income of men and women in rural areas and the difference between the average income for the gender group.
Women in rural areas 2015 Men in rural areas 2015

Industry Distribution of average Difference from Industry Distribution of Average Difference from
employment (%) Income (1000 average group employment (%) Income (1000 average group
SEK) income (%) SEK) income (%)

Residential care 13.67 192.2 − 8.0 Specialized 12.74 312.5 5.8

activities construction
activities
Education 13.45 184.9 − 12.2 Manufacture of 5.67 323.9 9.1
fabricated metal
products
Social work activities 12.93 179.0 − 15.9 Land transport and 4.93 327.6 10.2
without transport via
accommodation pipelines
Retail trade 11.04 190.3 − 9.0 Retail trade 4.45 268.3 − 9.7
Human health activities 7.73 233.3 11.1 Construction of 4.40 329.6 10.7
buildings
Public administration 5.29 246.8 16.0 Wholesale trade 4.30 316.1 6.9
and defence
Accumulated sum 64.12 Accumulated sum 36.48

without housing values being considered. We focus only on individuals of a
rural origin, following them from the age of 20 to the age of 30.
We assumed that individuals migrate if they expect the income value
of moving to be positive and that higher human capital increases the
incentives for such moves. Considering this, our results may add to
understanding why people choose to stay in a rural region rather than
move away from it. First, if one is an individual with a rural background,
one has choices to make, just like the urban counterparts. In terms of
one’s ability to increase one’s income, opportunities may be fewer if one
stays than if one moves away. There are also fewer educational oppor­
tunities and if one graduates, there may also be fewer job opportunities.
If one does not wish to move, the choices become rather restricted.
However, our findings suggest that staying in a rural region is rarely
negatively related to an individual’s income level and is most often
insignificant. If we also consider housing values, it is instead consistently
financially beneficial to stay in a rural region for less educated
individuals.
Second, we find that if one stays in their rural region and attains a
higher education, a monetary loss from that choice of location can be
expected. On the one hand, rural regions in Sweden may not have a labor
market to offer jobs that match different sorts of human capital. Labor
demand and supply are both larger in cities, which increases labor
productivity through better matching (Glaeser & Mare, 2001). In such
cases, a job at a rural location would generally be related to lower in­
come even if one has a higher education simply because the matching in
the labor market is less effective. Because of this, the wage differentials
between high and low educated individuals become smaller in rural
areas. In comparison, the human capital wage premium in urban regions
is bigger and large enough to cover the extra housing cost (Florida,
2017).
On the other hand, not all of income is related to higher education.
As shown in a recent report (Eklund & Pettersson, 2017), the overall
picture is that the educational system is incapable of saturating the labor
market. Also, the education premium is overall very low in Sweden. This
is partly supported by our results that show how labor market experi­
ence seems to have a higher pay-off than education. Since we know that
knowledge tends to agglomerate in space, the decision to stay in a rural
region may be better combined with the decision not to achieve higher
education, but rather to begin employment immediately after high
school. Unfortunately, the result of this may be fatal for many rural
regions, which are now in a situation searching for highly educated
human capital to keep up with the increased global competition.
An additional point to be made is that incomes can also be related to
investment in housing. For those who move to bigger cities and can
afford to buy their housing, it can be an opportunity to cash in on the
appreciated value of their investment to buy cheaper housing in a more
rural region later in life. While this aspect is not covered in our paper, it
is an alternative source of income that would be beneficial for those who
migrate to cities (Fielding, 1992).
Third, our results suggest that regional characteristics are of
importance for incomes, both in terms of sectorial structure and overall
labor market. Following agglomeration theory and the evidence on the
urban wage premium, this is not at all surprising (Yankow, 2006). Given
that we have narrowed our focus to individuals with a rural home re­
gion, our results are unique and highly policy relevant. Subsidies
directed to rural regions are today distributed with little attention on
“degrees of rurality” and how these may require diverse levels of sup­
port, if any at all. Rural areas can be close to urban areas, but they can
also be located very far away from labor market opportunities. One
might expect that rural areas located nearby urban areas are in any need
of support or only to a lesser extent. Those individuals can access urban
amenities without losing rural amenities.
However, one cannot forget that individuals may stay in their home
rural areas for many reasons. Rural areas can potentially compensate for
their lower incomes with lower housing costs. The role and magnitude of
this differential seem to vary with the economic nature of the region,
specifically its industry structure. Rural regions in Sweden are highly
heterogenous in this respect and this also causes differences in the
housing market. Due to industry structures, some regions have high
incomes, which is not completely reflected in their housing costs. Other
regions have relatively low incomes but have housing costs driven up by
external demand.
Is this situation unique to Sweden then? We believe that this is not
the case. A large percentage of the world’s countries have experienced
far-reaching urbanization in recent decades. Many of the cities that have
had an increase in net migration have also had sharply increased
housing values. The migration to cities has not only been driven by
highly educated individuals, but individuals with different levels of
education and different opportunities to get a job that pays well. In other
words, cities bring together individuals with different backgrounds and

9
L. Bjerke and C. Mellander
thereby different probabilities to find acceptable housing and jobs. We
also know from several studies (Florida, 2017; Florida & Mellander,
2015) that, for example, segregation has increased in large, attractive
cities over time, which is most likely a function of this very process. The
issue has also been raised in other contexts than the Swedish, for
example, by Autor (Badger & Bui, 2019) as well as by Florida (2017).
In sum, this research suggests that there are winners and losers, but
they differ depending on the focus. Getting a university degree almost
consistently adds to income, with some exceptions, and with such an
education level, leaving a rural area will likely generate a higher
paycheck. In our selected group of individuals, about 30 % had a uni­
versity degree by the age of 30; for them moving to an urban area would
be a better financial choice – even when the higher housing costs are
considered. However, among the remaining 70 %, it may be wiser to stay
in a rural location since the possible higher wage levels of urban loca­
tions most likely will not cover their extra costs of housing. Cities may
still be a land of opportunity for high-skilled workers but less so for those
without a university degree.
CRediT authorship contribution statement
The corresponding author* is responsible for ensuring that the
Appendix A
Fig. A1. Rural and urban regions.
10
Cities 130 (2022) 103850
descriptions are accurate and agreed by all authors.
Lina Bjerke*: conceptualization, methodology, formal analysis,
writing-review & editing, visualization, data curation.
Charlotta Mellander: Writing-original draft, writing-review &
editing, conceptualization.
Declaration of competing interest
All authors have participated in (a) conception and design, or anal­
ysis and interpretation of the data; (b) drafting the article or revising it
critically for important intellectual content; and (c) approval of the final
version.
This manuscript has not been submitted to, nor is under review at,
another journal or other publishing venue.
The authors have no affiliation with any organization with a direct or
indirect financial interest in the subject matter discussed in the
manuscript.
The following authors have affiliations with organizations with
direct or indirect financial interest in the subject matter discussed in the
manuscript.
L. Bjerke and C. Mellander Cities 130 (2022) 103850

Fig. A2. Municipal employment shares within the agricultural sector, manufacturing sector, hospitality sector, and mining sector respectively 2015.

11
L. Bjerke and C. Mellander Cities 130 (2022) 103850

Appendix B. Accessibility measure

We define accessibility to population as follows: Each municipality (i) offers access to a Y, where;
Y ∈ {No of Population}
But there is also an access to Y in the closely located municipalities (j). This is the case for all municipalities in the set N {1, …,n}. The total Y in
municipality i is defined as follows:
( )
AYi = Yi f (cii ) + Yj f cij + … + Yn f (cin )

where f(c) is a distance decay function to determine how the accessibility value is influenced by the related cost of reaching these individuals. We
approximate this specific relationship by an exponential function:
( ) { }
f cij = exp − λtij

where tij is the time distance between municipality i and j. λ is a time-sensitivity parameter that determines how the accessibility changes in t. λ has
been estimated by Johansson et al. (2003) and reflects the implicit value of daily time use.
When we combine the two equations, we get that the Y accessibility in municipality i is defined as follows:
∑
290
{ }
AYi = Yj exp − λtij
j=1

Appendix C. Variables

Variable Definition Year

Income Gross wage from employment and/or net income from self-employment 2015
Same municipality 1: If the individual lives in the same municipality at age 30 as they did at age 18 2005/2015
0: Otherwise
Same LLM 1: If the individual lives in the same local labor market region (LLM) but not the same municipality at age 30 as they did at age 18. 2005/2015
0: Otherwise
Migration freq. Number of times the individual changed residential municipality between 2005 and 2015 2005–2015
(Migration freq.)2 Above squared 2005–2015
Gender 1: Man All
0: Woman
Married 1: Married and/or living together with another person 2015
0: Otherwise
LM experience The number of years the individual has been working between age 20 and age 30 2015
Long education 1: At least a year at university or equivalent 2015
0: Otherwise
Immigration background 1: Foreign born All
0: Otherwise
Housing cost Median house price in the municipality 2015
Manufacturing Share of employees in the municipality within the manufacturing sector 2015
Agriculture Share of employees in the municipality within the agricultural sector 2015
Mining Share of employees in the municipality within the mining sector 2015
Hospitality Share of employees in the municipality within the hospitality sector 2015
Creative Share of employees in the municipality within the creative sector 2015
Accessibility Accessibility (see Appendix B) to population 2015
Source: Statistics Sweden (SCB) for all variables.

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