Convergence between Russian regions
AbstractIn this paper we study convergence among Russian regions. We find that while there was no convergence in 1990s, the situation changed dramatically in 2000s. While interregional GDP per capita gaps still persist, the differentials in incomes and wages decreased substantially. We show that fiscal redistribution did not play a major role in convergence. We therefore try to understand the phenomenon of recent convergence using panel data on the interregional reallocation of capital and labor. We find that capital market in Russian regions is integrated in a sense that local investment does not depend on local savings. We also show that economic growth and financial development has substantially decreased the barriers to labor mobility. We find that in 1990s many poor Russian regions were in a poverty trap: potential workers wanted to leave those regions but could not afford to finance the move. In 2000s (especially in late 2000s), these barriers were no longer binding. Overall economic development allowed even poorest Russian regions to grow out of the poverty traps. This resulted in convergence in Russian labor market; the interregional gaps in incomes, wages and unemployment rates are now below those in Europe. The results imply that economic growth and development of financial and real estate markets eventually result in interregional convergence.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Center for Economic and Financial Research (CEFIR) in its series Working Papers with number w0180.
Length: 82 pages
Date of creation: Oct 2012
Date of revision:
Contact details of provider:
Postal: 117418 Russia, Moscow, Nakhimovsky pr., 47, office 720
Phone: +7 (495) 105 50 02
Fax: +7 (495) 105 50 03
Web page: http://www.cefir.ru
More information through EDIRC
Convergence; economic growth; Russian regions; financial development; migration.;
Find related papers by JEL classification:
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- 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-2012-11-11 (All new papers)
- NEP-CIS-2012-11-11 (Confederation of Independent States)
- NEP-CWA-2012-11-11 (Central & Western Asia)
- NEP-GEO-2012-11-11 (Economic Geography)
- NEP-PBE-2012-11-11 (Public Economics)
- NEP-TRA-2012-11-11 (Transition Economics)
- NEP-URE-2012-11-11 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Laura Solanko, 2008. "Unequal fortunes: a note on income convergence across Russian regions," Post-Communist Economies, Taylor & Francis Journals, vol. 20(3), pages 287-301.
- Fran�ois Libois & Vincenzo Verardi, 2012.
"Semiparametric Fixed-Effects Estimator,"
1201, University of Namur, Department of Economics.
- Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
- Konstantin A. Kholodilin & Aleksey Oshchepkov & Boriss Siliverstovs, 2009.
"The Russian Regional Convergence Process: Where Does It Go?,"
Discussion Papers of DIW Berlin
861, DIW Berlin, German Institute for Economic Research.
- Konstantin Kholodilin & Alexei Oshchepkov & Boriss Siliverstovs, 2009. "The Russian regional convergence process: Where does it go?," KOF Working papers 09-216, KOF Swiss Economic Institute, ETH Zurich.
- Thomas Herzfeld, 2008. "Inter-regional output distribution: a comparison of Russian and Chinese experience," Post-Communist Economies, Taylor & Francis Journals, vol. 20(4), pages 431-447.
- Phan, Diep & Coxhead, Ian, 2008.
"Interprovincial Migration and Inequality During Vietnam's Transition,"
Staff Paper Series
507, University of Wisconsin, Agricultural and Applied Economics.
- Phan, Diep & Coxhead, Ian, 2010. "Inter-provincial migration and inequality during Vietnam's transition," Journal of Development Economics, Elsevier, vol. 91(1), pages 100-112, January.
- Alexander Libman, 2012. "Democracy, size of bureaucracy, and economic growth: evidence from Russian regions," Empirical Economics, Springer, vol. 43(3), pages 1321-1352, December.
- Yemtsov, Ruslan, 2003. "Quo Vadis? Inequality and Poverty Dynamics across Russian Regions," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Fedorov, Leonid, 2002. "Regional Inequality and Regional Polarization in Russia, 1990-99," World Development, Elsevier, vol. 30(3), pages 443-456, March.
- Hartmut Lehmann & Maria Giulia Silvagni, 2013.
"Is There Convergence of Russia's Regions?: Exploring the Empirical Evidence: 1995–2010,"
OECD Economics Department Working Papers
1083, OECD Publishing.
- Lehmann, Hartmut & Silvagni, Maria Giulia, 2013. "Is There Convergence of Russia's Regions? Exploring the Empirical Evidence: 1995–2010," IZA Discussion Papers 7603, Institute for the Study of Labor (IZA).
- H. Lehmann & M. G. Silvagni, 2013. "Is There Convergence of Russia’s Regions? Exploring the Empirical Evidence: 1995 – 2010," Working Papers wp901, Dipartimento Scienze Economiche, Universita' di Bologna.
- Alisher Akhmedjonov & Irina N. Il’ina & Carol S. Leonard & Zafar Nazarov & Evgenij E. Plisetskij & Elena S. Vakulenko, 2013. "Russia’s regions: governance and Well-being, 2000-2008," HSE Working papers WP BRP 42/EC/2013, National Research University Higher School of Economics.
- Breinlich, Holger & Ottaviano, Gianmarco & Temple, Jonathan, 2013.
"Regional Growth and Regional Decline,"
CEPR Discussion Papers
9568, C.E.P.R. Discussion Papers.
- Holger Breinlich & Gianmarco I.P. Ottaviano & Jonathan R.W. Temple, 2013. "Regional growth and regional decline," Economics Discussion Papers 729, University of Essex, Department of Economics.
- Holger Breinlich & Gianmarco I. P. Ottaviano & Jonathan R. W. Temple, 2013. "Regional Growth and Regional Decline," CEP Discussion Papers dp1232, Centre for Economic Performance, LSE.
- Muravyev, Alexander & Oshchepkov, Aleksey, 2013. "Minimum Wages, Unemployment and Informality: Evidence from Panel Data on Russian Regions," IZA Discussion Papers 7878, Institute for the Study of Labor (IZA).
- Alexander Muravyev & Aleksey Oshchepkov, 2013. "Minimum wages and labor market outcomes: evidence from the emerging economy of Russia," HSE Working papers WP BRP 29/EC/2013, National Research University Higher School of Economics.
- Eller, Markus & Fidrmuc, Jarko & Fungácová , Zuzana, 2013. "Fiscal policy and regional output volatility: Evidence from Russia," BOFIT Discussion Papers 13/2013, Bank of Finland, Institute for Economies in Transition.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julia Babich).
If references are entirely missing, you can add them using this form.