Effects of Regional Income and Educational Differentials on Migration and Regional Convergence

Enkh-Amgalan Byambajav () and Terukazu Suruga

No 23, GSICS Working Paper Series from Graduate School of International Cooperation Studies, Kobe University

Abstract: This paper investigates how interregional labor migration affects regional population and economic convergence on the basis of costs and benefits that workers face in migrating. We interpret costs as the cost of time during the migration process and itemize benefits as workers' choice either to pursue education that increases their future income or to increase current income by entering the labor force immediately upon migrating. Mongolian economic data is used to show the numerical implications for convergence speeds. The model predicts that migration directly affects population convergence. The larger choice of higher education tends to accelerate convergence speed, but this speed is inversely related to years of schooling. This paper also empirically investigates the convergence of per capita GDP across Mongolia's 22 aimags***. If we include the net migration rate in convergence equations, empirical results imply that the estimated ƒÀ coefficient shows that per capita GDP converges more rapidly to the steady-state position. This means that migration speeds up convergence, as the theoretical model predicts.

Keywords: Convergence; Per capita GDP; Education; Speed of Convergence; Migration (search for similar items in EconPapers)
JEL-codes: O15 O18 O47 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2010-11
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Persistent link: https://EconPapers.repec.org/RePEc:kcs:wpaper:23

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