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Regional Convergence and The Causal Impact of Migration on Regional Growth Rates

Author

Listed:
  • Murat G. Kirdar

    () (Department of Economics, METU)

  • D. Sirin Saracoglu

    () (Department of Economics, METU)

Abstract

The standard growth theory predicts that allowing for labor mobility across regions would increase the speed of convergence in per capita income levels and that migration has a negative causal impact on regional growth rates. Although the empirical literature has uncovered some evidence for the former implication, the latter has not been verified empirically. This paper provides empirical evidence for the negative causal impact of migration on provincial growth rates in a developing country with a high level of internal migration that is characterized by unskilled labor exiting rural areas for urban centers. We utilize instrumental variables estimation method with an instrument unique to the country examined and also control for provincial fixed effects.

Suggested Citation

  • Murat G. Kirdar & D. Sirin Saracoglu, 2007. "Regional Convergence and The Causal Impact of Migration on Regional Growth Rates," ERC Working Papers 0702, ERC - Economic Research Center, Middle East Technical University, revised Jan 2007.
  • Handle: RePEc:met:wpaper:0702
    as

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    File URL: http://www.erc.metu.edu.tr/menu/series07/0702.pdf
    File Function: First version, 2007
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    References listed on IDEAS

    as
    1. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    2. Reichlin, Pietro & Rustichini, Aldo, 1998. "Diverging patterns with endogenous labor migration," Journal of Economic Dynamics and Control, Elsevier, vol. 22(5), pages 703-728, May.
    3. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. "Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-389, September.
    4. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
    5. Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 1127-1170.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Dennis Coates & T. H. Gindling, 2013. "Is Hispanic Population Dispersion Into Rural Counties Contributing To Local Economic Growth?," Contemporary Economic Policy, Western Economic Association International, vol. 31(4), pages 649-668, October.

    More about this item

    Keywords

    Regional convergence; Regional growth; Internal migration; Fixed effects; IV estimation;

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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