Senior Migration, Local Economic Development and Spatial Concentration

We document that migration flows upon retirement are predominantly from richer, more urban to poorer, more rural regions. In theory, the local economic implications of senior in-migration are ambiguous, while empirically there is little existing evidence on whether attracting mobile seniors can be an effective tool to promote economic development among lagging regions. We combine a unique collection of microdata from France with a new empirical strategy to fill this gap. We find that senior inflows have significant positive effects on the local economy over the course of a decade, including increases in the working-age population, total employment, GDP, average incomes, fiscal revenues and housing construction. These effects are particularly pronounced among initially poorer regions. They are accompanied by an increase in the share of services in the local economy, driven by employment growth in health, food services and retail sectors. Combining these estimates with observed region-to-region net migration flows, we find that mobile seniors have become a significant force for reducing the concentration of employment and GDP across regions.