Why do not They Move from Rural to Urban Areas? Inter-Regional Migration in Romania

This paper examines the role of wages and unemployment rates as major potential economic causes of internal migration between the separate regions of Romania in the period 1995-2005. The different inter-regional migration routes are treated as cross-section units in a panel data structure, with unobserved characteristics for each route modelled as fixed effects. The cross-section SUR (seemingly unrelated regressions) estimation indicates that wage in origin regions had a significant influence on internal migration flows, but unemployment rates in origin and destination regions have apparently played no part. When time is accounted for, results show that wages in destination regions become very significant and migration is explained by pull rather than push effects.