Population Migration and Regional Economic Disparities

Abstract

This paper constructs an economic growth model featuring both developed and underdeveloped regions to examine the effects of inter-regional labor migration on both regional population structures and regional economic disparities. As part of the natural growth of the labor force in the two types of regions, agents from underdeveloped areas move to developed areas in pursuit of higher income, resulting in migration costs. In analyzing the effects of dynamic inter-regional labor migration on regional economic equilibrium (RBGP equilibrium) and aggregate economic equilibrium (ABGP equilibrium), this paper concludes that labor flows into developed areas promote local economic growth and that labor flows out of underdeveloped areas hinder local economic growth. Increased regional labor disparities will lead to increased regional economic disparities; therefore, to promote steady growth in the aggregate economy, regional economic policy should focus on coordinating regional economic development.

Keywords: labor migration, regional population structure, regional economic disparities

JEL Classification: O14, O40, O41