Endogenous mobility, human capital and trade
AbstractThe paper presents a model that can explain how regional differences emerge in a country as a consequence of foreign trade. The model is based on the widely used increasing returns/transportation costs framework. In addition to the conventional elements, heterogeneous households and imperfect labor mobility are added. The results indicate that for a small economy international trade leads to human capital reallocation, and thus more regional inequality than without labor heterogeneity. Even small migration ows can lead to large inequalities in per capita incomes, if the most skilled workers move. The model also sheds some light on the relative importance of fundamentals and historical factors.
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Bibliographic InfoPaper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 528.
Length: 31 pages
Date of creation: 01 Oct 2001
Date of revision:
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More information through EDIRC
Migration; human capital; regional inequalities;
Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-04-15 (All new papers)
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