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Does a Federal Country Need Federal Transfers When It Has Labour Mobility?


  • Tiago Neves Sequeira
  • Alexandra Ferreira Lopes


Sequeira T. N. and Lopes A. F. Does a federal country need federal transfers when it has labour mobility?, Regional Studies. This work empirically tests optimum currency area theory for members of a given monetary union (the United States). The United States is recognized as a country where labour mobility between states is high. This paper jointly assesses the consequences of having federal transfers and labour mobility in terms of the states' cyclical output. It is concluded that federal transfers undoubtedly contribute to increase cyclical output. However, out-migration may increase or decrease cyclical output, depending on certain conditions. As federal transfers proved to be much more important than migration, the answer to the question in the paper's title is 'yes'. [image omitted] Sequeira T. N. et Lopes A. F. Un pays federal, a-t-il besoin des transferts federaux quand il est deja dote de la mobilite du travail?, Regional Studies. Cet article cherche a tester empiriquement la theorie des zones monetaires optimales pour ce qui est des pays-membres d'une union monetaire donnee (a savoir, les Etats-Unis). On considere les Etats-Unis comme un pays ou la mobilite interregionale du travail est importante. Cet article cherche donc a evaluer les consequences des transferts federaux et de la mobilite du travail du point de vue de la production cyclique des etats. Cela amene a la conclusion suivante: les transferts federaux contribuent indubitablement a une hausse de la production cyclique. Toujours est-il que le solde migratoire negatif pourrait accroitre ou decroitre la production cyclique, suivant la conjoncture. Donne que les transferts federaux s'averent plus importants que ne l'est la migration, la reponse a la question posee est 'oui'. Migration interne Transferts federaux Convergence cyclique Enquete a echantillon permanent Generalized method of moments (GMM) Sequeira T. N. und Lopes A. F. Benotigt ein foderaler Staat einen Finanzausgleich zwischen den Bundesstaaten, wenn seine Arbeitskrafte mobil sind?, Regional Studies. In diesem Beitrag uberprufen wir auf empirische Weise die Theorie der optimalen Wahrungsraume fur die Mitglieder einer bestehenden Wahrungsunion (der Vereinigten Staaten). Die USA gelten als Land mit hoher Mobilitat von Arbeitskraften innerhalb der Bundesstaaten. In diesem Beitrag untersuchen wir gemeinsam die Folgen eines Finanzausgleichs zwischen den Bundesstaaten und einer Mobilitat von Arbeitskraften fur die zyklische Produktionsleistung der Staaten. Wir ziehen den Schluss, dass der Finanzausgleich zwischen den Bundesstaaten zweifellos zu einer Erhohung der zyklischen Produktionsleistung beitragt. Allerdings kann die zyklische Produktionsleistung in Abhangigkeit von bestimmten Bedingungen aufgrund von Abwanderung zu- oder abnehmen. Da sich der Finanzausgleich zwischen Bundesstaaten als deutlich wichtiger erweist als die Migration, lasst sich die Frage in der Uberschrift bejahen. Interne Migration Finanzausgleich zwischen Bundesstaaten Zyklische Konvergenz Paneldaten Generalized method of moments (GMM) Sequeira T. N. y Lopes A. F. ¿Necesita un pais federal transferencias entre las diferentes regiones si la fuerza de trabajo es movil?, Regional Studies. En este trabajo comprobamos desde un punto de vista empirico la teoria de las areas monetarias optimas para los miembros de una determinada union monetaria (los Estados Unidos). Estados Unidos es reconocido como un pais cuya movilidad laboral entre los estados es alta. En este articulo valoramos conjuntamente las consecuencias de disponer de transferencias entre las diferentes regiones y la movilidad laboral en terminos del rendimiento ciclico de los estados. Concluimos que las transferencias entre las regiones contribuyen sin duda a aumentar el rendimiento ciclico. Sin embargo, la emigracion puede causar un aumento o una disminucion del rendimiento ciclico en funcion de ciertas condiciones. Puesto que se ha demostrado que las transferencias entre regiones son mucho mas importantes que las migraciones, la respuesta a la pregunta del titulo es afirmativa. Migracion interna Transferencias entre regiones Convergencia ciclica Datos del panel Metodo generalizado de momentos (Generalized method of moments (GMM))

Suggested Citation

  • Tiago Neves Sequeira & Alexandra Ferreira Lopes, 2010. "Does a Federal Country Need Federal Transfers When It Has Labour Mobility?," Regional Studies, Taylor & Francis Journals, vol. 44(9), pages 1117-1129.
  • Handle: RePEc:taf:regstd:v:44:y:2010:i:9:p:1117-1129
    DOI: 10.1080/00343400903365078

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    References listed on IDEAS

    1. Paul Cashin & Ratna Sahay, 1996. "Internal Migration, Center-State Grants, and Economic Growth in the States of India," IMF Staff Papers, Palgrave Macmillan, vol. 43(1), pages 123-171, March.
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