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Effects of Regional Income and Educational Differentials on Migration and Regional Convergence

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  • Enkh-Amgalan BYAMBAJAV
  • Terukazu SURUGA

Abstract

This paper investigates how interregional labor migration affects regional population and economic convergence on the basis of costs and benefits that workers face in migrating. We interpret costs as the cost of time during the migration process and itemize benefits as workers' choice either to pursue education that increases their future income or to increase current income by entering the labor force immediately upon migrating. Mongolian economic data is used to show the numerical implications for convergence speeds. The model predicts that migration directly affects population convergence. The larger choice of higher education tends to accelerate convergence speed, but this speed is inversely related to years of schooling. This paper also empirically investigates the convergence of per capita GDP across Mongolia's 22 aimags***. If we include the net migration rate in convergence equations, empirical results imply that the estimated ƒÀ coefficient shows that per capita GDP converges more rapidly to the steady-state position. This means that migration speeds up convergence, as the theoretical model predicts.

Suggested Citation

  • Enkh-Amgalan BYAMBAJAV & Terukazu SURUGA, 2010. "Effects of Regional Income and Educational Differentials on Migration and Regional Convergence," GSICS Working Paper Series 23, Graduate School of International Cooperation Studies, Kobe University.
    • Handle: RePEc:kcs:wpaper:23
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    File URL: http://www.research.kobe-u.ac.jp/gsics-publication/gwps/2010-23.pdf
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    References listed on IDEAS

    as
    1. Somesh Kumar Mathur, 2005. "Absolute and Conditional Convergence: Its Speed for Selected Countries for 1961--2001," GE, Growth, Math methods 0503002, University Library of Munich, Germany.
    2. Somesh K. Mathur, 2005. "Economic Growth and Conditional Convergence: Its Speed For Selected Regions For 1961-2001," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 40(2), pages 185-208, December.
    3. Mr. Kevin C Cheng, 2003. "Growth and Recovery in Mongolia During Transition," IMF Working Papers 2003/217, International Monetary Fund.
    4. Somesh Kumar Mathur, 2005. "Absolute and Conditional Convergence: Its Speed for Selected Countries for 1961--2001," Macroeconomics 0510023, University Library of Munich, Germany.
    5. Dunlevy, James A & Bellante, Don, 1983. "Net Migration, Endogenous Incomes and the Speed of Adjustment to the North-South Differential," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 66-75, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Convergence; Per capita GDP; Education; Speed of Convergence; Migration;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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