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The more the merrier? Migration and Convergence among European Regions

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  • Lorenz B. Fischer
  • Michael Pfaffermayr

Abstract

Using a spatial systems estimator to incorporate spatial interactions and endogeneity of income levels and migration, this paper finds a positive effect of migration on cohesion within the European Union on the NUTS 2 level. As migration can generally be observed from low to high income regions, growth rates of income per worker tend to decrease in regions experiencing net immigration, while lagging regions experience higher speeds of income convergence. As a result, migration increases sigma-convergence. Results show an increase of more than one third. Free movement of persons also proves to increase efficiency, displayed by higher average convergence speeds.

Suggested Citation

  • Lorenz B. Fischer & Michael Pfaffermayr, 2015. "The more the merrier? Migration and Convergence among European Regions," Working Papers 2015-08, Faculty of Economics and Statistics, Universität Innsbruck.
    • Handle: RePEc:inn:wpaper:2015-08
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    More about this item

    Keywords

    Conditional spatial beta- and sigma-convergence; Migration; Spatial Solow model; European regions;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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