The role of migration in regional wage convergence: Evidence from Sweden 1860–1940

Kerstin Enflo, Christer Lundh and Svante Prado

Explorations in Economic History, 2014, vol. 52, issue C, 93-110

Abstract: Sweden experienced a decline in inter-county real wage differentials for agricultural workers between 1860 and 1940, historical evidence of early labor market integration well before widespread unionization in agriculture occurred. By means of dynamic panel data analysis, this paper examines whether internal and external migrations caused real wage beta convergence across Swedish counties. To account for statistical problems such as endogeneity of migration, time-invariant county characteristics and autocorrelation in the regression model, we adjust our estimates using fixed effects, instrumental variables and GMM. The preferred model shows that both internal and external migrations contributed to wage convergence before the First World War and internal migration mainly during the interwar years. The agglomeration effects of urbanization were not sufficiently pervasive to offset the labor supply effects of internal and external migrations.

Keywords: Migration; Wage convergence; Labor market integration; Instrumental variables; GMM (search for similar items in EconPapers)
JEL-codes: J61 N93 N94 R1 (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:exehis:v:52:y:2014:i:c:p:93-110

DOI: 10.1016/j.eeh.2013.12.001

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