SFB 303 Discussion Paper No. A - 582
Author: Biswas, Debashis and Margit, Sugata
Title: Interregional Migration and Polarisation:
A Theoretical Analysis
Abstract: We suggest that people higher up in the income ladder
care more for the 'quality of life' rather than for
the level of income per se. We introduce such a
behaviourial assumption in a model of 'rural-urban'and
'urban-urban' migration. 'Quality of life' depends
crucially on the 'social infrastructure' which is
provided by the regional governments. We show, how
starting from a given distribution of skilled labour
across two regions and given state of social infrastructure,
one of the region loses all the skilled people and the
regions are polarised as 'skilled' and 'unskilled' segments
of an economy. The results derived in the model continue
to hold in more robust specifications of the framework.
They also continue to hold when regions are allowed
to choose tax rates to finance 'quality of life'.
Keywords: Migration, Polarisation
JEL-Classification-Number: R0, J6, H4
Creation-Date: September 1998
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