Multiple Core Regions: Regional Inequality in Switzerland, 1860–2008

This chapter does three things. First, it estimates regional gross domestic product (GDP) for three different geographical levels in Switzerland (97 micro regions, 16 labor market basins, and 3 large regions). Second, it analyzes the evolution of regional inequality relying on a heuristic model inspired by Williamson (1965), which features an initial growth impulse in one or several core regions and subsequent diffusion. Third, it uses index number theory to decompose regional inequality into three different effects: sectoral structure, productivity, and comparative advantage. The results can be summarized as follows: As a consequence of the existence of multiple core regions, Swiss regional inequality has been comparatively low at higher geographical levels. Spatial diffusion of economic growth occurred across different parts of the country and within different labor market regions. This resulted in a bell-shaped evolution of regional inequality at the micro regional level and convergence at higher geographical levels. In early and in late stages of the development process, productivity differentials were the main drivers of inequality, whereas economic structure was determinant between 1888 and 1941. The poorest regions suffered from comparative disadvantage, that is, they were specialized in the vary sector (agriculture), where their relative productivity was comparatively lowest.