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Regional convergence at the county level: The role of commuters

Author

Listed:
  • Melanie Krause

    (Department of Economics, University of Hamburg)

  • Sebastian Kripfganz

    (Department of Economics, University of Exeter)

Abstract
The growth trajectory of a region is known to be influenced by the economic circumstances of other regions in its proximity. While proximity is often understood in a geographic sense, we consider commuting as a channel for cross-regional economic dependencies. Commuters, who spend a substantial portion of their income in a different place from where they earn it, connect peripheral regions to economic centers. In contrast to geographic measures, commuter flows are inherently asymmetric and heterogeneous, as are the economic dependencies among regions. We estimate a time-space dynamic panel model with German county-level data, and demonstrate a considerable variation in the distribution of shock responses which is hidden by the traditional focus on average marginal effects. In counterfactual experiments, the local spatial multipliers differ substantially depending on the nature of the shock or policy intervention and the assumed network structure, with implications for the growth convergence process.

Suggested Citation

  • Melanie Krause & Sebastian Kripfganz, 2022. "Regional convergence at the county level: The role of commuters," Discussion Papers 2201, University of Exeter, Department of Economics.
    • Handle: RePEc:exe:wpaper:2201
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    File URL: https://exetereconomics.github.io/RePEc/dpapers/DP2201.pdf
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    Keywords

    regional convergence; commuting; spatial weight matrix; shock propagation; time-space dynamic panel data model;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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