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Migration and Regional Disparities: the Role of Skill Biased Flows

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  • Ugo Fratesi

    (Università Bocconi)

  • Massimiliano Riggi

    (Università Bocconi)

Abstract

The persistence of disparities is one of the most striking features of regional development. We argue that movements of labour force, instead of being an always equilibrating mechanism, can also make persistent or even reinforce such inequalities. The most advanced regions are in fact generally more attractive, in terms of opportunities, especially to more qualified workers, who, in turn, are an essential ingredient of regional development and competitiveness because of the human capital they bear. We set up a two-regional framework, with a continuum of different skill- type individuals. Each agent’s utility function depends on the wage she earns through her skills, leaving the process of human capital formation out of this paper. Within this framework, we identify and model two complementary mechanisms for skill biased migration flows to take place. The first one resides in the way wages are set. If, in fact, the most skilled workers are not paid their productivity because of wage compression, they will have an incentive to move towards regions with a more dispersed wage scheme. The second mechanism dwells in the existence of some regional specific immobile assets, which make workers di®erently productive in different regions; this happens to a larger extent for those endowed with highest skills, which will therefore be more likely to overcome the mobility costs. Hence a Kaldor-type cumulative process bearing persistent regional disparities is set up.

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Bibliographic Info

Paper provided by EconWPA in its series Urban/Regional with number 0407004.

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Length: 33 pages
Date of creation: 15 Jul 2004
Date of revision:
Handle: RePEc:wpa:wuwpur:0407004

Note: Type of Document - pdf; pages: 33
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Citations

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Cited by:
  1. Ugo Fratesi, 2004. "Regional policy from a supra-regional perspective," ERSA conference papers ersa04p509, European Regional Science Association.
  2. de Grip, Andries & Fouarge, Didier & Sauermann, Jan, 2009. "What Affects International Migration of European Science and Engineering Graduates?," IZA Discussion Papers 4268, Institute for the Study of Labor (IZA).
  3. Ceren Ozgen & Peter Nijkamp & Jacques Poot, 2010. "The effect of migration on income growth and convergence: Meta-analytic evidence," Papers in Regional Science, Wiley Blackwell, vol. 89(3), pages 537-561, 08.
  4. Alexander Kubis & Lutz Schneider, 2012. "Human Capital Mobility and Convergence – A Spatial Dynamic Panel Model of the German Regions," IWH Discussion Papers 9, Halle Institute for Economic Research.
  5. Fratesi, Ugo, 2007. "The Spatial Diffusion of Innovations and the Evolution of Regional Disparities," Investigaciones Regionales, Asociación Española de Ciencia Regional, issue 11, pages 131-160.
  6. Terry Gregory & Melanie Arntz & Florian Lehmer, 2011. "Unequal Pay or Unequal Employment? What Drives the Self-Selection of Internal Migrants in Germany?," ERSA conference papers ersa11p972, European Regional Science Association.
  7. Naude, Wim, 2008. "Conflict, Disasters, and No Jobs: Reasons for International Migration from Sub-Saharan Africa," Working Paper Series RP2008/85, World Institute for Development Economic Research (UNU-WIDER).
  8. Arntz, Melanie & Gregory, Terry & Lehmer, Florian, 2012. "Unequal Pay or Unequal Employment? What Drives the Skill-Composition of Labor Flows in Germany?," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62309, Verein für Socialpolitik / German Economic Association.
  9. Terry Gregory & Roberto Patuelli, 2013. "Regional Age Structure, Human Capital and Innovation - Is Demographic Ageing Increasing Regional Disparities?," Working Paper Series 51_13, The Rimini Centre for Economic Analysis.

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