Does technological progress magnify regional disparities?

Takatoshi Tabuchi, Jacques Thisse and Zhu Xiwei

No 599, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: We study how technological progress in manufacturing and transportation to-gether with migration costs interact to shape the space-economy. Rising labor productivity in the manufacturing sector fosters the agglomeration of activities, whereas falling transport costs associated with technological and organizational in-novations fosters their dispersion. Since these two forces have been at work for a long time, the final outcome must depend on how drops in the costs of producing and trading goods interact with the various costs borne by migrants. Finally, when labor is heterogeneous, the most efficient workers of the less productive region are the first to move to the more productive region.

Keywords: Economic geography; Labor productivity; Manufacturing industries; Transportation; New economic geography; Technological progress; Migration costs; Labor heterogeneity (search for similar items in EconPapers)
JEL-codes: J61 R12 (search for similar items in EconPapers)
Date: 2016-05-01
New Economics Papers: this item is included in nep-eff, nep-geo, nep-lab and nep-ure
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Citations: View citations in EconPapers (1)

Published in IDE Discussion Paper = IDE Discussion Paper, No. 599. 2016-05-01

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Related works:
Journal Article: DOES TECHNOLOGICAL PROGRESS MAGNIFY REGIONAL DISPARITIES? (2018)
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