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Factor Mobility and Income Growth: Two Convergence Hypotheses

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  • Razin, Assaf
  • Yuen, Chi-Wa

Abstract

While technologies and policy fundamentals are presumably different internationally, inducing differences in growth rates, capital mobility can be a powerful force in equalizing output growth rates across countries. The paper provides some indirect evidence in support of this effect. In the context of regional growth, however, labor mobility can potentially equalize income levels across regions in the presence of human capital externalities. Supporting evidence is found for this effect, revealing that restrictions on labor flows tend to make per capita incomes more divergent across nations and/or regions. Copyright 1997 by Blackwell Publishing Ltd

Suggested Citation

  • Razin, Assaf & Yuen, Chi-Wa, 1997. "Factor Mobility and Income Growth: Two Convergence Hypotheses," Review of Development Economics, Wiley Blackwell, vol. 1(2), pages 171-190, June.
    • Handle: RePEc:bla:rdevec:v:1:y:1997:i:2:p:171-90
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    Cited by:

    1. Jinghua Zhang & Fangwei Wu & Deyuan Zhang & Yongmin Wang, 2009. "A study on labor mobility and human capital spillover," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 1(3), pages 342-356, May.
    2. Hashimzade, Nigar & Myles, Gareth D., 2010. "Growth And Public Infrastructure," Macroeconomic Dynamics, Cambridge University Press, vol. 14(S2), pages 258-274, November.
    3. Rehme, Gunther, 2006. "Redistribution and economic growth in integrated economies," Journal of Macroeconomics, Elsevier, vol. 28(2), pages 392-408, June.
    4. Miao Yi & Shen Zhou, 2016. "China's Labor Market Integration and the Effect of Economic Openness," Review of Development Economics, Wiley Blackwell, vol. 20(1), pages 164-175, February.
    5. Assaf Razin & Chi-Wa Yuen, 1999. "Optimal International Taxation and Growth Rate Convergence: Tax Competition vs. Coordination," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(1), pages 61-78, February.

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