In how far individuals react to economic incentives is one of the core questions in all of economics. Basic economic theory predicts that workers take advantage of changes in economic activity by moving to those places or occupations that offer them the highest utility. How strong is this migration response into different parts of the economy and in how far does it impact the regional and sectoral distribution of economic activity? To answer these questions it is important to understand the underlying economic mechanisms. Policymakers, for example, need to consider the mobility response of economic agents across regions and occupations when providing local public goods or redistributing income. By focusing on the causes and consequences of migration and sectoral choice responses of heterogeneous workers, this thesis contributes to the understanding of these questions.