The purpose of this paper is to study what factors determined the average income growth and net migration at the municipal level in Sweden between 1981-1990. Our results suggest a negative correlation between the initial level of average income and the subsequent average income growth, which can be interpreted in terms of conditional convergence. We also find that local government policy variables are important determinants of net migration and average income growth. However, there is no evidence to suggest that the presence of a university or a university college in the municipality affects local growth and mobility patterns.