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



Fig. 3

From fig. 3 the following relations are evident:
φu break < φ self-selection < φu sustain <φs break < φs sustain
there exist therefore a range of trade costs for which a self-selecting equilibrium is possible (φ
self-selection < φ < φs sustain) and another smaller range for which is the only stable
equilibrium (
φu sustain < φ < φs break).

The critical values considered depend on the parameters of the model. All the threshold
values are increasing in
μ. If the share of manufactures in the economy is large, the

29



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