The assumption of equilibrium in models of migration

In recent articles Evans (1990) and Harrigan and McGregor (1993) (hereafter HM) scrutinized the equilibrium model of migration presented in a 1989 paper by Schachter and Althaus. This model used standard microeconomics to analyze gross interregional migration flows based on the assumption that gross flows are in approximate equilibrium. HM criticized the model as theoretically untenable, while Evans summoned empirical as well as theoretical objections. HM claimed that equilibrium of gross migration flows could be ruled out on theoretical grounds. They argued that the absence of net migration requires that either all regions have equal populations or that unsustainable regional migration propensities must obtain. In fact some moves are inter- and other are intraregional. It does not follow, however, that the number of interregional migrants will be larger for the more populous region. Alternatively, a country could be divided into a large number of small regions that have equal populations. With uniform propensities to move, each of these analytical regions would experience in equilibrium zero net migration. Hence, the condition that net migration equal zero is entirely consistent with unequal distributions of population across regions. The criticisms of Evans were based both on flawed reasoning and on misinterpretation of the results of a number of econometric studies. His reasoning assumed that the existence of demand shifts as found by Goldfarb and Yezer (1987) and Topel (1986) invalidated the equilibrium model. The equilibrium never really obtains exactly, but economic modeling of migration properly begins with a simple equilibrium model of the system. A careful reading of the papers Evans cited in support of his position showed that in fact they affirmed rather than denied the appropriateness of equilibrium modeling. Zero net migration together with nonzero gross migration are not theoretically incompatible with regional heterogeneity of population, wages, or amenities.     

An equilibrium model of gross migration

ABSTRACT The paper presents and tests a new model of migration which differs significantly from the conventional disequilibrium approach. We show that variations in rates of gross migration across regions are equilibrium responses to variations in levels of amenities, governmental policies, etc. The model is tested using data on the gross migration of whites, 1975-80, together with amenities such as climate and with economic variables such as government services, taxes and unionization. Empirical results suggest that the equilibrium model is more consistent with actual migration patterns than is the conventional disequilibrium approach. We estimate compensating differentials and migration elasticities for these variables.     

A Life‐cycle Model of Locational Choice in a Two‐region Economy*

The ability to use the amenities or other characteristics of a location may be a function of the length of time a household has resided in the location. We explore the implications of the hypothesis that the enjoyment of regional amenities depends on the accumulation of amenity‐specific human capital. We establish that the interaction of this human capital with regional wage rates determines life‐cycle locational trajectories. The model explains the timing of moves in the working and retirement periods of life as well as observed heterogeneity in household behavior. Small differences between households may result in dramatically different life‐cycle behavior.