Regional labor markets and the household migration decision

"The current work extends the modeling of the household migration decision to take into account location-specific influences and relates these to regional wage differentials. This allows for more complete analysis of real wage gains or losses associated with migration and inferences regarding the nature of equilibrium or disequilibrium wage differentials between regions." Data are from the Michigan Panel Study of Income Dynamics for the period 1976-1978. "The results indicate systematic and often substantial influences of household location on the nominal wage and on both job and residence mobility. Based on these findings, comparisons of wage growth patterns are made for those changing jobs and region of residence status. Although compared to other households the wage growth of these migrants is on average lower before migration and higher after migration, the analysis provides no support for arguments that nominal regional wage differentials reflect systematic ordering of real wage differentials. This finding suggests that real wage gains are closely tied to the interregional migration decision but are not related to regional nominal wage differentials in a simple fashion."     

Does size of local labour markets affect wage inequality? a rank-size rule of income distribution

The questions addressed in this paper are: (i) does wage inequalityincrease with local population size, and if so, (ii) what arepossible factors behind this increase? In a cross-section analysisof Swedish local labour markets using unique full populationdata, the article shows that urban scale, i.e. size of localpopulation, has significant positive effects on wage inequality.Testing for potential explanations, labour market diversification,human capital, migration, age structure and employment are shownto be significantly associated with inequality. Given theseeffects, the article raises the question of how to understandand incorporate scale effects into models of long-term changein wage inequality.     

Regional Wage Inequality in China, 1996-2010

This paper examines regional wage inequality in China between 1996 to 2010, subdividing that time span into a period of increased wage inequality during 1996-2002 and one of stable to decreasing inequality for 2003-2010. Based on the interplay between wage levels and wage growth, the authors develop a typology whereby China's provinces can be assigned to either peripheral, emerging, lagging, or leading regions. The particular characteristics associated with each type of wage region, and the factors underlying shifts of particular provinces from one category to another between the two periods, enable them to identify specific causes for the reversal (after 2002) of the trend toward increasing wage inequality (the causes especially reflect wage patterns in the mining and energy industries, information and communication technology industries, and foreign-invested enterprises). The recent wage convergence involves instances of both interior provinces advancing from the "emerging" to the "leading" wage category as well as the decline of a few "leading" coastal provinces to "lagging" status.     

Migration and market wage risk

The author presents an approach to the analysis of labor migration that incorporates the role of market wage variability as a source of information in individual migration decisions. "The focus...is on quantifying the effects of the origin market acting through amenities and the share of market-specific wage variability as it affects forecasts of alternative wages and forecast precision. A subsample of employed males...from the [U.S.] National Longitudinal Survey of Youth (NLS) age 16 to 22 years is used for estimation. The empirical results are consistent with the theoretically predicted relationship between migration propensities and regional differences in the information content of wages. In addition, the results provide evidence that risk aversion deters migration given uncertainty, measured by forecast precision, about alternative market wage levels."     

Struggling to Save Cash: Seasonal Migration and Vulnerability in West Bengal,India

This article concerns an important but overlooked means by which able‐bodied poor people get hold of lump sums of cash in rural West Bengal: seasonal migration for agricultural wage work. Drawing on a regional study of four migration streams, our main focus here is on the struggle to secure this cash by landless households in just one of those streams, originating in Murshidabad District. Case studies are used to illustrate the importance for women in nuclear families of maintaining supportive networks of kin for periods when men are absent. A parallel analysis is made of the negotiations between male migrant workers and their employers, at labour markets, during the period of work, and afterwards. The article then briefly discusses some of the contrasting ways in which remittances are used by landless households and owners of very small plots of land, in the context of rapid ecological change, demographic pressure and growing inequality.     

The determinants of labor migration in Egypt

The factors which affect individual decisions with regard to geographic movement in Egypt are examined and the magnitude in which each factor exerts its influence on aggregate geographic labor supply adjustments is estimated. The spatial unit used in the study is the administrative region, of which there are 25. No effort is made to esimate the impact which migration has had on the origin or destination region. The migrant will presumably choose that destination which, given his information, the migrant thinks will be best. The model which is employed attempts to explain gross interregional migration without the explicit introduction of an individual decision function. Rather, migration is related to certain aggregate proxy variables. Among the independent variables employed in the analysis are (origin and destination) income, education, urbanization, and population. The other explanatory variable used is the distance between region i and region j. The migration measure employed refers to cumulative male migration which occurred prior to 1960; the independent variables are defined for a given point in time (1960). The independent variables explain a reasonably large percentage of the variance in migration between regions in Egypt. All variables were significant at the 5% level or better. The findings indicate that distance acts as an important impediment to migration. Migration is away from low wage and toward high wage regions, which may have contributed to a narrowing of regional wage differentials. Migrants are attracted to regions which have large populations and to regions which have a large percentage of urban to total population. A tendency exists for migrants to come from regions with large populations. There is also some tendency for migrants to come from regions which have a relatively large urban population. Migrants do not appear to come from regions with high educational levels.     

THE OPTIMAL CONVERGENCE OF REGIONAL INCOMES*

For many policy considerations it is assumed that the convergence of regional mean income will improve national equity by reducing overall inequality. The literature on decomposability of social welfare functions implies that this assumption is unwarranted. This paper develops a notion of optimal regional convergence. In general, the point of optimal convergence depends on the shapes of the regional income distributions, the inequality index used, and the rule for distributing interregional transfers. These concepts are illustrated with data on the regional income distributions of the Southern and Northern United States.     

REGIONAL HETEROGENEITY IN WAGE DISTRIBUTIONS: EVIDENCE FROM SPAIN*

ABSTRACT Regional differences in real wages have been shown to be both large and persistent in the United States and the U.K., as well as in the economies of other countries. Empirical evidence suggests that wage differentials adjusted for the cost of living cannot only be explained by the unequal spatial distribution of characteristics determining earnings. Rather, average wage gap decomposition reveals the important contribution made by regional heterogeneity in the price assigned to these characteristics. This paper proposes a method for assessing regional disparities in the entire wage distribution and for decomposing the effect of differences across regions in the endowments and prices of the characteristics. The hypothesis forwarded is that the results from previous studies obtained by comparing average regional wages may be partial and nonrobust. Empirical evidence from a matched employer–employee dataset for Spain confirms marked differences in wage distributions between regions, which do not result from worker and firm characteristics but from the increasing role of regional differences in the return to human capital.     

Migration and regional inequality: changing characteristics of China’s economic inequality

Scholars studying economic inequality in China have maintained that regional inequality and economic divergence across provinces have steadily increased over the past 30 years. New studies have shown that this trend is a statistical aberration; calculations show that instead of quickly and sharply rising, regional inequality has actually decreased, and most recently, remained stable. Our study suggests that China’s unique migratory regime is crucial to understanding these findings. We conduct a counterfactual simulation to demonstrate how migration and remittances have mitigated income inequality across provinces in order to show that without these processes, we would have seen more of a rise in interprovincial income inequality. We conclude by arguing that inequality in China is still increasing, but it is changing and becoming less place-based. As regional inequality decreases, there are signs that point to the increasing importance of interpersonal inequality.     

STEADY-STATE LABOR TURNOVER AS OPTIMAL HOUSEHOLD BEHAVIOR*

ABSTRACT. Models of the firm with costly labor turnover and models of migration with location-specific consumption amenities are two standard explanations of the co-existence of persistent wage differentials with extensive labor mobility. Labor turnover models postulate a worker quit function where the quit rate is inversely related to the regional wage differential in the steady state. We use amenity-consumption models of migration to show conditions under which this postulate is consistent with household utility maximization. Our model extends standard amenity-consumption analysis by making the value of amenities contingent on the “state” of the household. These household states are defined in terms of demographic, education, and health characteristics and are assumed to follow a Markov process.     

A Methodology for Estimating Returns to Skills for Canadian Provinces and U.S. States

Differences in both regional skill prices and skill mix can explain interregional variations in wage distributions. We control for interregional differences in skill mix that permit us to compute key parameters of regional wage distributions including regional returns to skills. In addition to setting forth the methods in detail, we also present estimates for 48 U.S. states and 10 Canadian provinces. For both males and females, we find that regional mean wages (with controls for skills mix) in the U.S. and Canada are similar, but that the returns to skills are systematically higher in the U.S.     

京津冀地区城市间行业工资差异及影响因素分析

基于2005-2012年京津冀各城市工资及其它社会经济数据,探讨了市场潜能、产业集聚、人力资本、制度改革等因素对城市间各行业工资差异的影响。结果表明：①市场潜能对各行业工资水平的增长均有一定的促进作用。②除消费性服务业外,各类产业集聚对地区平均工资水平的提高均有一定的促进作用,但制造业集聚带来的拥挤效应也已开始体现;生产性服务业集聚能够带动公共性服务业工资的提升,而公共性服务业缺乏对生产性服务业的反哺;产业集聚对消费性服务业工资缺乏带动作用。③在控制变量方面,交通基础设施对工资水平的带动作用逐渐弱化;科技投入、人力资本对服务业工资水平的带动作用较高,而对制造业影响较弱;市场经济体制改革对工资水平的带动作用仍未体现;政府市场干预能力的提高仅带动了公共性服务业工资的提升,而外向度的提升则仅对公共性服务业缺乏带动作用。     

Working women in the city and urban wage growth in the United States

Although the female labor force participation rate of women has been steadily rising in the United States, there is substantial variation across cities. Previous cross‐county studies find that gender inequality in employment reduces economic efficiency hindering growth. This result is examined in a regional context, across metropolitan areas in the United States. Throughout multiple model formulations including instrumental variables approaches, higher initial female labor force participation rates are positively related to subsequent wage growth in metropolitan areas between 1980 and 2010. Specifically, every 10 percent increase in female labor force participation rates is associated with an increase in real wages of nearly 5 percent.     

THE EFFECT OF YOUTH POVERTY RATES AND MIGRATION ON ADULT WAGES

We created a migration and earnings history from the National Longitudinal Survey of Youth to analyze the effects of youth county poverty rates on the adult earnings of white male migrants. We estimate a log wage equation that includes human capital measures, migration types, county poverty rates, and a rural–poverty rate interaction variable. Growing up in a rural county has a negative impact on adult wages independent of youth county poverty rates, but the rural effect is significantly greater for those who grew up in high poverty counties. Youth county poverty rates indirectly affect wages through the returns to migration.     

Revisiting interregional wage differentials: New evidence from Spain with matched employer-employee data

This article examines wage differences across Spain's NUTS-2 regions along the entire wage distribution based on matched employer-employee microdata from 2006 to 2014. Unlike previous related studies, we properly control for differences in regional purchasing power parities, which are very large in practice. Although part of the raw regional wage differences observed is explained by differences between regions in productive structures, and, to a much lesser extent, in labor forces, noteworthy, very similar throughout the wage distribution regional differences net of composition effects arise even after controlling for a broad set of individual and firm characteristics.     

The Geography of Economic Development and Racial Discrimination in Brazil

This study investigates the relationship between unequal resource and population distribution and racial wage inequality in Brazil. Using sample data from the 1980 Brazilian census, monthly wages were estimated for white and Afro-Brazilian men working in nine metropolitan areas. Estimates showed that racial disparities in wages existed across all regional labour markets. Regression-based decomposition analysis found that a substantial portion of the racial wage gap was due to discrimination (unequal pay), while estimates of the magnitude of labour market discrimination indicated considerable variation by geographical area. Discrimination was higher in the predominantly white and highly developed areas of the South than in the former slave and underdeveloped regions of the Northeast.     

Regional Inequality of Industrial Output in China, 1952 to 1990

This paper examines regional inequality of industrial output in China from 1952 to 1990. This study reveals that regional inequality was widespread when socialist China was established in 1949. It was reduced in the 1950s as a result of the efforts to develop the interior through the implementation of the First Five Year Plan (1953–57). After that, regional inequality persisted for one-and-a-half decades due mainly to the poor economic returns of the defence-oriented "Third Front" programme, decentralization, the reorientation of development policies, and the incidence of disruptive political events. Since the launch of economic reforms in 1978, interregional inequality among the eastern, central and western regions has gradually increased. However, interprovincial inequality decreased. The relative decline of the traditionally rich provinces (three municipalities and the northeastern industrial bases) has contributed to the decline of interprovincial inequality. Meanwhile, favourable state policy, local initiatives and foreign investment and trade have stimulated the growth of the coastal provinces of Jiangsu, Guangdong, Shandong, Zhejiang and Fujian, leading to more rapid coastal development and the increase of interregional inequality. The emerging new map of regional development is important to the understanding of regional inequality in post-Mao China.     

INDUSTRIAL DISPERSION IN THE SOVIET UNION: AN APPLICATION OF ENTROPY MEASURES

Industrial dispersion across the republics of the USSR between 1926 and 1974 is described through the use of entropy measures. Ostensibly, a set of location principles would guide such dispersion, and several of them stress regional equalization as an important consideration in locating industry. Therefore, trends in regional inequality (in industrialization) are investigated through the use of inequality statistics derived from entropy measures at three different spatial scales. Between 1926 and 1960, inequality among the republics decreased, but has increased between 1960 and 1974. However, inequality has decreased between the economic regions of the USSR between 1940 and 1975, and at the oblast level, there has been a tendency toward greater equality (homogeneity) within each economic region or republic since 1960. In attempting to account for these diverse trends, it is suggested that they are largely the result of the priority of efficiency considerations in location decisions rather than those of regional equity per se.     

江苏省区域经济差异与发展战略演变初探

改革开放以来,江苏省分别实施了区域均衡发展、非均衡发展、区域共同发展和苏北大发展战略,造成了各区域间经济增长速度的差异,导致区域经济发展失衡,其主要表现为苏南、苏中与苏北三大经济区域间的差异和县域经济差异的不断扩大。在分析了现阶段江苏省沿江开发战略对区域发展差异的影响,立足区域整合的角度,提出加快沿江开发与苏北互动发展的对策与措施,以期实现江苏省区域经济的协调发展,扭转南北经济差异进一步扩大的趋势。     

Land Markets in the Harris-Todaro Model: A New Factor Equilibrating Rural-Urban Migration

Recent research in the Harris-Todaro (HT) tradition has added an important new element to the model by incorporating an urban land market. Brueckner and Zenou (1999) (hereafter BZ) argue that a model where migration equalizes expected wages between city and countryside may overlook another important force that equilibrates the process of rural-urban migration. This force is the migration-induced rise in the urban cost of living, which occurs principally through escalation of urban land rents as the city population expands. Land-rent escalation, which tends to limit rural-urban migration, provides an important additional force that may help determine city sizes in developing countries. The present paper provides a simpler alternative to BZ's analysis by assuming that urban residents smooth their income as they cycle between formal and informal employment. This allows migration decisions to be based on the expected wage, as in the usual HT framework, in a model that includes a land market. The analysis shows that this modified framework generates results slightly different from those of BZ.