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Regional Income Convergence in Portugal (1991-2002)

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  • Gertrudes S. Guerreiro

    ()
    (University of Évora, Economics Department and CEFAGE-UE)

Abstract

Our research aims to address the problem of inequality in income distribution from a different perspective than the usual. We intend to verify if geography influences the pattern of inequality, that is, if the standard of living varies from region to region and if, in the process of growth, spatial units in Portugal have been converging in terms of most relevant variables, such as income. We search the answers to these questions by introducing the treatment of convergence between smaller territorial units, the municipalities as individuals. We intend to evaluate convergence or divergence in income growth and test empirically the theoretical hypothesis that ?-convergence, although necessary, is not a sufficient condition for ?-convergence. To study convergence, we use information about GDP and wages for NUTS III regions, and wages for municipalities. We observe spatial dependence between municipalities, so we estimate spatial econometric models to test convergence. With regard to conditional convergence between municipalities, the model most appropriate is the one which includes in the explanatory variables the weight of primary sector employment, leading us to conclude that this variable distinguishes the "steady state" of the small economies. Variables like the activity rate and percentage of active population with higher education also reveal highly significant on the growth of wages, reflecting the different contexts of the labor market at regional level.

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Bibliographic Info

Paper provided by University of Evora, CEFAGE-UE (Portugal) in its series CEFAGE-UE Working Papers with number 2012_17.

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Length: 42 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:cfe:wpcefa:2012_17

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Postal: Colégio Espírito SANTO
Phone: (351) 266 740 869
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Web page: http://www.cefage.uevora.pt
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Related research

Keywords: Income Distribution; Regional Inequality; Regional Convergence; Spatial Econometrics.;

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  1. Ricardo Fuentes-Nieva & Isabel Pereira, 2010. "The disconnect between indicators of sustainability and human development," Human Development Research Papers (2009 to present) HDRP-2010-34, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
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  5. Farhad Noorbakhsh, 2005. "Spatial Inequality, Polarization and its Dimensions in Iran: New Empirical Evidence," Oxford Development Studies, Taylor & Francis Journals, vol. 33(3-4), pages 473-491.
  6. Farhad Noorbakhsh, . "Human Development and Regional Disparities in India," Working Papers 2003_12, Business School - Economics, University of Glasgow.
  7. Mark McGillivray & Howard White, 1993. "Measuring development? The UNDP's human development index," Journal of International Development, John Wiley & Sons, Ltd., vol. 5(2), pages 183-192, 03.
  8. Neumayer, Eric, 2001. "The human development index and sustainability -- a constructive proposal," Ecological Economics, Elsevier, vol. 39(1), pages 101-114, October.
  9. Carmen Herrero & Ricardo Martínez & Antonio Villar, 2010. "Improving the Measurement of Human Development," Human Development Research Papers (2009 to present) HDRP-2010-12, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
  10. Farhad Noorbakhsh, 1998. "The human development index: some technical issues and alternative indices," Journal of International Development, John Wiley & Sons, Ltd., vol. 10(5), pages 589-605.
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Cited by:
  1. Gertrudes Saúde Guerreiro & António Bento Caleiro, 2014. "A convergência espacial do conhecimento em Portugal," Economics Working Papers 01_2014, University of Évora, Department of Economics (Portugal).

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