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Regional Intergration and Migration: An Economic Geography Model with Hetergenous Labour Force

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Nicola D. Coniglio

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Abstract

This paper aims to analyse the effect of deepening regional integration on the incentive for factors of production, in particular labour, to spatially relocate. We adopt a general equilibrium, economic-geography model built on Krugman (1991) allowing for skill heterogeneity in the manufacturing sector. At a given level of trade costs, due to the productivity premium associated with the concentration of high-skilled workers in one region, this type of worker will be more willing to migrate than low-skilled ones. The paper shows the existence of a range of trade costs for which only high-skilled workers have an incentive to migrate. Therefore, introducing labour heterogeneity in the basic core-periphery model enables us to explain one of the most striking features of interregional migration patterns: the positive self-selection of the migrants.

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Paper provided by Department of Economics, University of Glasgow in its series Working Papers with number 2003_1.

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Date of creation: Dec 2002
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Handle: RePEc:gla:glaewp:2003_1

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