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Capital-induced labor migration in a spatial Solow model

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  • João Juchem Neto
  • Julio Claeyssen

Abstract

In this work we consider labor mobility in the spatial Solow model for economic growth. Besides considering that labor diffuses from regions with higher density to regions with lower density of labor, we consider that workers move from regions with lower density of capital to regions with higher density of capital, and that the labor force grows following a logistic law. Through stability analysis, we show that the introduction of capital-induced labor migration in the Solow model is a necessary condition for reaching an unstable regime that can generate a rich spatio-temporal dynamics. Numerical simulations show that, depending on the migration intensity and on the size of the economy, this modified Solow model can develop, endogenously, four kinds of behavior for the economy: (i) convergence to a homogeneous steady-state; (ii) convergence to a non-homogeneous steady-state; (iii) development of periodic spatio-temporal cycles; and (iv) development of irregular and aperiodic spatio-temporal cycles. Copyright Springer-Verlag Wien 2015

Suggested Citation

  • João Juchem Neto & Julio Claeyssen, 2015. "Capital-induced labor migration in a spatial Solow model," Journal of Economics, Springer, vol. 115(1), pages 25-47, May.
    • Handle: RePEc:kap:jeczfn:v:115:y:2015:i:1:p:25-47
    DOI: 10.1007/s00712-014-0404-6
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    References listed on IDEAS

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    1. Benteng Zou & Carmen Camacho, 2004. "The spatial Solow model," Economics Bulletin, AccessEcon, vol. 18(2), pages 1-11.
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    3. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    4. Camacho, Carmen & Zou, Benteng & Briani, Maya, 2008. "On the dynamics of capital accumulation across space," European Journal of Operational Research, Elsevier, vol. 186(2), pages 451-465, April.
    5. Brock, William & Xepapadeas, Anastasios, 2010. "Pattern formation, spatial externalities and regulation in coupled economic-ecological systems," Journal of Environmental Economics and Management, Elsevier, vol. 59(2), pages 149-164, March.
    6. Guerrini, Luca, 2006. "The Solow-Swan model with a bounded population growth rate," Journal of Mathematical Economics, Elsevier, vol. 42(1), pages 14-21, February.
    7. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
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    Cited by:

    1. Juchem Neto, J.P. & Claeyssen, J.C.R. & Pôrto Júnior, S.S., 2018. "Economic agglomerations and spatio-temporal cycles in a spatial growth model with capital transport cost," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 494(C), pages 76-86.
    2. Juchem Neto, Joao Plinio & Claeyssen, Julio Cesar Ruiz & Porto Junior, Sabino da Silva, 2014. "A spatial Solow model with transport cost," MPRA Paper 59766, University Library of Munich, Germany.
    3. Sahar Amidi & Ali Fagheh Majidi & Bakhtiar Javaheri, 2020. "Growth spillover: a spatial dynamic panel data and spatial cross section data approaches in selected Asian countries," Future Business Journal, Springer, vol. 6(1), pages 1-14, December.
    4. Ali Balcı, Mehmet, 2017. "Time fractional capital-induced labor migration model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 477(C), pages 91-98.
    5. Yiming Zhou, 2020. "Urban agglomeration and heterogeneous firms: a synthesis of Helpman and Melitz," Journal of Economics, Springer, vol. 130(3), pages 275-296, August.

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    More about this item

    Keywords

    Spatial growth model; Solow model; Economic geography; Industrial agglomeration; O40; R12; J61;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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