Interregional migration and polarisation. A theoretical analysis

Abstract

We suggest that people higher up in the income ladder care more for the 'quality of life' rather than for the level of income per se. we introduce such a behavioural assumption in a model of 'rural-urban' and 'urban-urban' migration. 'Quality of life' depends crucially on the 'social infrastructure' which is provided by the regional governments. We show, how starting from a given distribution of skilled labor across two regions and state of social infrastructure, one of them loses all the skilled people and the regions are polarised as 'skilled' and 'unskilled' segments of an economy. The result derived in the model continue to hold in more robust specifications of the framework. Our results continue to hold when regions are allowed to choose tax rates to finance 'quality of life'. (orig.)SIGLEAvailable from TIB Hannover: RO 2708(582) / FIZ - Fachinformationszzentrum Karlsruhe / TIB - Technische InformationsbibliothekDEGerman