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

Author

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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.

Suggested Citation

  • Joern Rattsoe & Hildegunn Ekroll Stokke, 2009. "Regional income convergence, skilled migration and productivity response: Explaining relative stagnation in the periphery," Working Paper Series 9809, Department of Economics, Norwegian University of Science and Technology.
    • Handle: RePEc:nst:samfok:9809
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    References listed on IDEAS

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    Cited by:

    1. Hildegunn Stokke & Jörn Rattsö, 2011. "Income convergence, migration and geography: Distribution analysis of regions in Norway," ERSA conference papers ersa10p174, European Regional Science Association.
    2. Elena Vakulenko, 2016. "Does migration lead to regional convergence in Russia?," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 9(1), pages 1-25.
    3. 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.

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