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Regional income convergence, skilled migration and productivity response: Explaining relative stagnation in the periphery

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  • Joern Rattsoe

    ()
    (Department of Economics, Norwegian University of Science and Technology)

  • Hildegunn Ekroll Stokke

    ()
    (Department of Economics, Norwegian University of Science and Technology)

Abstract

Most country growth experiences imply urbanization with labor migration from poor to rich regions and relative stagnation in the periphery. We study mechanisms holding back regional income convergence emphasizing the importance of productivity. Recent research has addressed the effects of labor mobility for income convergence in the neoclassical growth model, but finds that migration has limited effect on the convergence process. We build skilled labor migration into a multi-regional neoclassical growth model and assume that skilled labor affects productivity. The formulation takes advantage of open economy growth models where human capital influences innovation and technology adoption. Skilled labor outmigration from periphery regions reduces the capacity to generate productivity growth. Calibration of the regional growth model shows that skilled outmigration has quantitative importance for the growth performance of the periphery with realistic parameters. The analysis of the consequences of capital shock reproducing backwardness shows how migration equilibrium can be reestablished only after prolonged relative stagnation.

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Bibliographic Info

Paper provided by Department of Economics, Norwegian University of Science and Technology in its series Working Paper Series with number 9809.

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Length: 26 pages
Date of creation: 27 Jan 2009
Date of revision:
Handle: RePEc:nst:samfok:9809

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Cited by:
  1. Jørn Rattsø & Hildegunn E. Stokke, 2011. "Migration and dynamic agglomeration economies: Regional income growth in Norway," Working Paper Series 11111, Department of Economics, Norwegian University of Science and Technology.
  2. Hildegunn Stokke & J√âˆrn Ratts√âˆ, 2011. "Income convergence, migration and geography: Distribution analysis of regions in Norway," ERSA conference papers ersa10p174, European Regional Science Association.
  3. Elena Vakulenko, 2014. "Does migration lead to regional convergence in Russia?," HSE Working papers WP BRP 53/EC/2014, National Research University Higher School of Economics.

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