The Effect Of Inter-regional Migration To Economic Growth And Regional Disparity

According to traditional theory, migration from low income regions to high income ones should have been an important source of convergence, but empirical researches find that migration in fact enlarge regional inequality in some countries. Some economists call this apparent gap by"Migration puzzle". Many people have tried to answer this puzzle but have not got a satisfactory one yet. Based on the framework of new economic geography first founded by Paul Krugman, a dynamic general equilibrium model, in which capital and labor mobility was introduced, was founded to study the roles of internal migration on regional income convergence. Contrary to traditional theory, the model shows that labor migration needn't give rise to income convergence because the effect of"capital-chasing-labor". The most important facts influence the relation of internal migration and regional convergence are the intensity of"learning by doing", congestion costs, and skill difference between city natives and new immigrants.Based on the 2002 China Regional Input-Output tables and other data from various sources, 30 provincial Social Accounting Matrixs were constructed, and then a 30 regions recursive dynamic computable general equilibrium model (CGE) was also founded to study the effect of inter-regional labor migration in China. This model has carefully taken into account of many migration characteristics in China, such as Circular migration, population migration lagged with labor migration, large amount of cash transfer and so on. By compare the regional economy growth rates and Gini coefficients of per-capita GDP and per-capita consumption under different labor migration rates, we find that inter-regional labor migration has little effect on the evolution of regional disparity of per capita GDP. However, we do find that regional disparity of per capita consumption decreased with the increasing number of internal migration. We can show that this is mainly due to the special migration characteristics of large scale of cash transfer between emigration and immigration regions. This result different much from many empirical studies of China's labor migration, most of which argue that inter-region migration in China will contribute much to the convergence of regional economy, but it do consistent with the theory model constructed in this paper. Also the result is consistent with the evolution of china regional disparity.According to the simulation results of CGE model, labor immigration can improve region's economic growth rate and increase the government revenue while lower the wage of urban labors. For the net emigration regions, the GDP growth rate may increase or decrease as the rural labor migrate to other regions, but the growth rate of per-capita GDP, per-capita consumption and per-capital income will be increased greatly. Finaly, the results indicate that inter-region migration is helpful in national economic growth, due to the more efficiently allocation of labor in the regions.