On the Mechanics of Migration Decisions; Skill Complementarities and Endogenous Price Differentials

Mariassunta Giannetti

No 366, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: Why are skilled workers more mobile than average? What determines positive migration flows toward relatively poorer regions or states of a country? How can one explain the sharp decrease in the mobility rate observed within European countries notwithstanding persistent regional disparities? This paper aims to answer these questions using skill complementarities and endogenous price differentials between the richest and the poorest regions. If the skill premium is increasing in the average level of human capital of a location, and the price of non-traded goods is higher in the more human capital intensive regions, the more skilled the workers are, the stronger are the economic incentives to migrate towards the richest regions. In contrast, the least skilled workers have an incentive to migrate to the poorest regions to minimize their living costs. In this context, interregional cost-of-living differentials arise endogenously if the selfselection of migrants affects total factor productivity in the traded goods sector, as pointed out by Balassa (1964) and Samuelson (1964). Moreover, if the process of capital accumulation provokes faster convergence in interregional wage differentials than in living costs, convergence in per capita GDP may hinder migration to the richest regions, even if it leaves large regional disparities.

Date: 2000-02
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.bancaditalia.it/pubblicazioni/temi-disc ... -0366/tema_366it.pdf (application/pdf)

Related works:
Journal Article: On the mechanics of migration decisions: skill complementarities and endogenous price differentials (2003)
Working Paper: On the Mechanics of Migration Decisions: Skill Complementarities and Endogenous Price Differentials (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_366_00

Access Statistics for this paper

More papers in Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area Contact information at EDIRC.
Bibliographic data for series maintained by ().