Equilibrium and disequilibrium perspectives on regional labor migration

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Harrigan, F.J. and McGregor, P.G. (1993) Equilibrium and disequilibrium perspectives on regional labor migration. Journal of Regional Science, 33 (1). pp. 49-67. ISSN 0022-4146 (http://dx.doi.org/10.1111/j.1467-9787.1993.tb00210...)

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Abstract

In this paper we consider the nature of possible equilibria in a regional economic system characterised by an absence of net migration flows but the presence of gross flows. We argue that the presence of gross flows in a stationary equilibrium is most easily generated through the introduction of stochastic elements into the decision maker's migration calculus. We observe that within such a stochastic setting there is, in stationary equilibrium, an implied inverse relationship between the probability of migration for the representative decision maker and the size of the regional population stock. We show that this relationship has some surprising implications in a world where decision makers have static expectations, but that its implications are quite natural in a world where decision makers form their expectations rationally. We then interpret the model of Schachter andathaus (1989) in terms of a rational expectations equilibrium, and demonstrate how their tests are incapable of discriminating between equilibrium and disequilibrium models of migration behavior. We propose a set of alternative tests which explicitly recognize the stuck-flow interactions between net migration and the distribution of regional population stocks and which make a clean distinction between equilibrium in the temporal and in the market-clearing sense.

ORCID iDs

Harrigan, F.J. and McGregor, P.G. ORCID logoORCID: https://orcid.org/0000-0003-1221-7963;
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