EDUCATION AND INCOME INEQUALITY IN THE REGIONS OF THE EUROPEAN UNION*

ABSTRACT This paper provides an empirical study of the determinants of income inequality across regions of the EU. Using the European Community Household Panel dataset for 102 regions over the period 1995–2000, it analyses how microeconomic changes in human capital distribution affect income inequality for the population as a whole and for normally working people. The different static and dynamic panel data analyses conducted reveal that the relationship between income per capita and income inequality, as well as between a good human capital endowment and income inequality is positive. High levels of inequality in educational attainment are also associated with higher income inequality. The above results are robust to changes in the definition of income distribution and may be interpreted as a sign of the responsiveness of the EU labor market to differences in qualifications and skills. Other results indicate that population ageing, female participation in the labor force, urbanization, agriculture, and industry are negatively associated to income inequality, while unemployment and the presence of a strong financial sector positively affect inequality. Finally, income inequality is lower in social‐democratic welfare states, in Protestant areas, and in regions with Nordic family structures.     

THE INFLUENCE OF HUMAN CAPITAL INVESTMENT ON MIGRATION AND INDUSTRY CHANGE*

ABSTRACT. Individuals’human capital investments in their regions, industries, and occupations are measured as a function of the years they spend in their current region, industry, or occupation, and these investments are shown empirically to influence migration. There is an interesting life cycle pattern to migration: it falls rapidly with new investments, but then resurfaces as an opportunity to renew investments and increase the growth rate of income. Income regressions substantiate the life cycle path of income growth implied by the migration model.     

Regional Convergence in Central and Eastern European Countries: A Multidimensional Approach

The paper examines the dynamics of regional income at the NUTS3 level of the new EU Member States from Central and Eastern Europe in the years 1998–2005. The authors apply a wide range of methods and tools including classical beta and sigma convergence analysis supplemented by transition matrices, kernel density estimations and spatial autocorrelation statistics. Results of such a multi-dimensional empirical study reveal some previously unrecognized patterns of regional growth in Central and Eastern European Countries (CEECs). Well-acknowledged metropolization and marginalization processes that cause regional divergence at the national scale are accompanied by the following processes. Firstly, at the macroregional scale, regional convergence has been observed as a result of differences in growth rates between individual countries. Secondly, at the national scale, petrification of existing regional structures has been prevailing in majority of the countries. Furthermore, weak convergence of clubs has been observed separately among the richest metropolitan regions and between the group of the poorest regions. In general, the polycentric spatial structure of the macroregion has reduced the impact of rapid growth of rich capital city-regions on convergence processes. Simultaneously, diffusion of development processes had a rather limited range and polarization in larger metropolitan regions have been a characteristic feature of CEECs.     

A NEOCLASSICAL MODEL OF REGIONAL GROWTH IN INDONESIA

In this paper a neoclassical model of regional growth is specified, estimated, and applied to the provinces of Indonesia. While parametric estimates indicate that factors of production respond as expected to neoclassical incentives, the attractiveness of growing regions for capital and labor inputs leads to instability and divergence among regions when the model is solved dynamically. A simulation of government intervention via a policy of encouraging capital growth in lagging regions demonstrates the potential of reversing such effects and encouraging regional convergence.     

人力资本结构、物质资本与经济增长

人力资本作为经济增长的一个重要因素,除了要考虑其总量与经济增长的关系外,还要考虑人力资本的结构对经济增长的影响。本文分析了我国不同层次的人力资本对经济增长的影响,并根据计量的结果和我国东、中、西部地区现有的人力资本结构情况,对各地区的人力资本培养战略和产业结构调整的方向给出了相应的政策、建议。     

SPATIAL CONVERGENCE OF REGIONS REVISITED: A SPATIAL MAXIMUM LIKELIHOOD PANEL APPROACH*

ABSTRACT This paper argues that one should account for the endogeneity of important explanatory variables and the initial differences in technological efficiency when analyzing spatial income convergence among regions. In addition, the approach of Wooldridge (2005), who proposes a convenient solution to the initial condition problem in dynamic panels, proves to be fruitful. In a panel of 211 European regions observed from 1980 to 2005, the estimated speed of convergence is substantially higher, on average, than the legendary 2 percent found in many cross‐section studies. Moreover, it exhibits pronounced variation across regions due to factor mobility and knowledge spillovers.     

Urbanization and Socioeconomic Status in the European Regions: The Role of Population Ageing and Capital City Regions

Using the European Community Household Panel data survey and confirmatory factor analysis, this paper explores the causal relationship between the multidimensional concepts of urbanization and socioeconomic status in the European Union. It shows that income, education and occupation are strongly related to status, and the density of population area and the town size, to urbanization. The relationship between urbanization and status is positive. This means that urban areas contain the residences of the elite, such as the rich, those with high levels of educational attainment and people with high-calibre jobs. This paper does not provide evidence to support the idea that individuals lose socioeconomic status as they age and that status is higher in capital city regions. The relationship between urbanization and status is relatively stronger for the old working-age cohort and for the non-capital city regions. These results have policy implications with regard to social welfare and urban and regional planning and development.     

Growth and Convergence Profiles in the Spanish Provinces (1965–1997)*

Abstract. Economic performance in Spanish provinces has led to a considerable improvement in standard of living of their populations. Intense capital accumulation since the 1950s played a key roll in this process. Provincial inequalities may increase or decrease as a result of this growth pattern. This study analyzes the evolution of the disparities by means of distribution dynamics techniques. It explicitly considers economic size of each province and whether spatial spillovers exist. Results indicate that the convergence process has been especially intense for labor productivity, total factor productivity, and capital intensity, while for per capita income the patterns of convergence are less marked. When we weight our analysis according to economic size of each province, our conclusions do not hold. However, when we take geographic location into account, we find support for our conclusions.     

North and south in the current crisis

The Italian Minister for Territorial Cohesion, Carlo Trigilia, reviews the current condition of the Italian south (the Mezzogiorno) and sets out the policies that the present government is seeking to implement. Underlining the need for long-term strategies and for close cooperation with European Union funding agencies, the Minister emphasizes the need to remove the political and institutional obstacles to development and promote human capital through measures designed to improve training, education and welfare programmes. He concludes the lack of economic growth in the southern regions poses serious dangers to the growth prospects of the national economy.     

Regional Efficiency in the European Union

This paper examines existing disparities in technical efficiency levels across the European regions over the period 1986–2002. The results reveal that technical efficiency is not randomly distributed across space in the European setting. On the contrary, the different tests performed highlight the presence of positive spatial autocorrelation and spatial heterogeneity in the distribution under consideration. In fact, we have detected several regional clusters characterized by similar efficiency levels distinguishing them from the rest of the sample. Nevertheless, the estimates carried out show the existence of a process of regional convergence in terms of technical efficiency during the study period. Our findings also reveal that factors such as the regional stock of capital per worker or the patterns of productive specialization are relevant in explaining the changes in technical efficiency experienced by the European regions between 1986 and 2002.     

The Spatial Distribution of the Internet in the European Union: Does Geographical Proximity Matter?

This paper examines the spatial distribution of the Internet in the European regions. To achieve this aim, our analysis combines a set of non-parametric techniques proposed in the context of the economic growth literature, with various spatial econometric instruments. The results reveal that regional disparities in Internet adoption are greater than territorial inequalities in gross domestic product (GDP) per capita. In addition, our findings show that the distribution under consideration is characterized by the presence of positive spatial dependence, which implies that physically adjacent regions register a similar degree of Internet adoption. Finally, the analysis carried out allows us to assess the role played by variables such as GDP per capita, unemployment rate, stock of human capital and population density, in explaining the spatial distribution of the Internet in the European Union.     

The role of exogenous and endogenous factors in the growth of regions in Central and Eastern Europe: the metropolitan/non-metropolitan divide in the pre- and post-crisis era

ABSTRACT

The aim of the paper is to analyse regional growth factors in Central and Eastern European Countries in the pre- and post-crisis era. The comparison is focused on core (metropolitan) and non-core (non-metropolitan) regions. The study found that the development processes of the analysed groups of regions were in many respects similar. Achieving a high level of development in the context of post-socialist transformation was possible mainly owing to exogenous factors such as the influx of foreign direct investment (FDI) and multimodal transport accessibility. In the case of endogenous factors, the number of small- and medium-sized enterprises per capita was of cardinal importance for a high level of development, but it was no guarantee of fast growth dynamics in non-core regions. The main differences between the core and non-core regions included the role of human capital and migrations as metropolitan regions represented growth poles which trained qualified specialists and served as destinations for migrants from non-core regions. However, the share of people with tertiary education played an important role in the development process of non-core regions. The crisis strengthened the role of exogenous growth factors, that is, the role of FDI inflow as well as the role of EU funds.     

Talent,technology and tolerance in Canadian regional development

This article examines the factors that shape economic development in Canadian regions. It employs path analysis and structural equation models to isolate the effects of technology, human capital and/or the creative class, universities, the diversity of service industries and openness to immigrants, minorities and gay and lesbian populations on regional income. It also examines the effects of several broad occupations groups—business and finance, management, science, arts and culture, education and health care—on regional income. The findings indicate that both human capital and the creative class have a direct effect on regional income. Openness and tolerance also have a significant effect on regional development in Canada. Openness towards the gay and lesbian population has a direct effect on both human capital and the creative class, while tolerance towards immigrants and visible minorities is directly associated with higher regional incomes. The university has a relatively weak effect on regional incomes and on technology as well. Management, business and finance and science occupations have a sizeable effect on regional income; arts and culture occupations have a significant effect on technology; health and education occupations have no effect on regional income.     

The Impact of Public Capital Stock on Regional Convergence in Turkey

The effect of public capital on regional output and private sector productivity has been the subject of considerable research in the field of regional development literature. However, there have been only a few studies that develop linkages between public capital and regional economic convergence. This study examines the dynamic effects of public capital and transportation capital stocks on output per capita in terms of regional convergence in Turkey at NUTS 2 level. A conditional convergence model based on per capita gross domestic product and per capita public capital and transportation capital stocks is estimated using the panel data set for the Turkish regions for the time period of 1980–2001. The results reveal that public capital has a positive and significant effect on output per capita and thus on regional convergence in some of the models in the Turkish regions,. However, the transportation component of public capital stock has a negative effect on regional convergence in all models employed in the study. This implies that transportation capital stock leads to larger regional disparities between the Turkish regions.     

IS SOCIAL CAPITAL USEFUL FOR EXPLAINING ECONOMIC DEVELOPMENT IN POLISH REGIONS?

The concept of social capital is widely perceived as a promising tool for explaining differences in economic development between countries and regions. According to this theory, weak links (bridging social capital) and social trust in an area favour its better access to other forms of capital, that is, economic and human capital. However, strong links (bonding social capital) may stifle creativity and entrepreneurship. Since the vast majority of research on the impact of social capital on economic development focuses on highly developed Western European countries, it seems particularly interesting to evaluate the usefulness of this approach when applied to post‐communist countries with their different experiences. The objective of this article is to identify the spatial variation of different forms of social capital in regions of Poland and then to test a hypothesis on the impact of this capital on regional economic development. The results demonstrate that despite the existing differences between regions there are no significant relationships between levels of social capital and economic development. This may be explained either by low social capital levels or by the overall degree of Polish economic development.     

ECONOMIC DEVELOPMENT TRENDS IN THE USSR, 1970-1988: PART I (PRODUCTION AND PRODUCTIVITY)

The first of two articles devoted to spatial and temporal trends in economic development and levels of living within the USSR focuses on changes in the pattern of absolute and per capita economic output—national income produced and gross value of industrial output (at the republic and economic regional level, respectively). It then investigates the question of whether divergence or convergence has occurred among republics and economic regions in terms of these indicators. Finally, it assesses patterns of change in labor and capital productivity across Soviet republics.     

Innovative Capacity,Educational Attainment and Economic Development in the European Union: Causal Relations and Geographical Variations

This article sets out to examine the innovative capacity of the European Union (EU) countries and regions vis-à-vis educational attainment and economic development, as it is frequently stated that innovation and the availability of human capital, specifically education, are the key drivers of economic growth. In addition to the aggregate level, the countries and NUTS-2 regions of the EU, and traditional indicators of the studied dimensions, were used as observation units. Granger causality tests identified education as a driving force behind innovative capacity and economic development, whereas the relationship between innovative capacity and economic development is bidirectional. The study results also confirm the existence of innovation paradoxes in form of rising research and development expenditures but modest rate of gross domestic product growth. The implications of the results concern the recognition of spatial generalizations and national variations, identification and creation of development strategies and the horizontal and vertical collaborations between the public and private sectors.     

Infrastructure and Growth in a Spatial Framework: Evidence from the EU regions

This paper examines the return to infrastructure in the European Union regions in a spatial framework. It innovates on the earlier literature on infrastructure and growth by a combination of regional focus, disaggregation of infrastructure types and consideration of spatial dependence. Different types of infrastructure capital are considered as determinants of economic performance at the Nomenclature des Unités Territoriales Statistiques level. To account for growth spillovers among regions, a spatial Durbin model is estimated. The results confirm the important role of infrastructure and identify the highest rates of return as associated with telecommunication, quality and accessibility of transportation networks, with a positive impact of roads and railways.     

Does graduate human capital production increase local economic development? An instrumental variable approach

Using a survey on Italian graduates, we investigate whether universities' degree production affects the economic development of the regions where academic institutions are located. To deal with suspected endogeneity between human capital development and economic growth, we employ an instrumental variable approach, using a global lump sum transferred to each university as an instrument for human capital production. Once we control for the regional flow of mobile students and graduates, the findings reveal the beneficial effect of the university system on local economic development through the gain in human capital.     

LOCAL INPUT AND PRODUCTIVITY GROWTH IN U.S. MANUFACTURING: 1972–2002*

ABSTRACT This research analyzes manufacturing growth and decline across metropolitan and nonmetropolitan regions during the 1972–2002 period. We decompose real value added growth across local labor market areas in the lower 48 U.S. states into contributions from labor, capital, and total factor productivity. We then estimate a model describing the long‐run growth of labor, capital, and productivity and find that increased productivity increases the growth of labor and capital, as well as a positive correlation between labor and capital stock growth. We also find evidence that human capital investment and agglomeration economies encourage productivity growth, while unionization discourages it.