Regional Intergration and Migration: An Economic Geography Model with Hetergenous Labour Force

UNIVERSITY
^of
GLASGOW

Department ^/Economics

Regional Integrationand Migration:

anEconomicGeographyModel with

Heterogeneous labour Force

Nicola D. Coniglio*

University ofGlasgow

Glasgow, December 2002

Abstract

This paper aims to analyse the effect of deepening regional integration on the incentive for
factors of production, in particular labour, to spatially relocate. We adopt a general
equilibrium, economic-geography model built on Krugman (1991) allowing for skill
heterogeneity in the manufacturing sector. At a given level of trade costs, due to the
productivity premium associated with the concentration of high-skilled workers in one region,
this type of worker will be more willing to migrate than low-skilled ones. The paper shows
the existence of a range of trade costs for which only high-skilled workers have an incentive
to migrate. Therefore, introducing labour heterogeneity in the basic core-periphery model
enables us to explain one of the most striking features of interregional migration patterns: the
positive self-selection of the migrants.

Keywords: core-periphery model, economic integration, economic geography,
interregional migration.

JEL Classification: F12, F15, F22, J24, R12

* I am grateful to Kjetil Bjorvatn, Karen Helene Midelfart, Ian Wooton, Maurizio Zanardi, and participants at the
CEPR workshop: “The Economic Geography of Europe: Measurement, Testing and Policy Simulations”, Villars
2002, and seminar participants at the University of Glasgow and the Norwegian School of Economics and
Business Administration in Bergen for useful comments and suggestions. The usual disclaimer applies.

1   2   3   4   >>

More intriguing information