No. 2/2011: Migration
and dynamic agglomeration economies: Regional income growth in Norway Jørn Rattsø and
Hildegunn E. Stokke Abstract The existence of agglomeration economies is well
established. We study dynamic agglomeration effects and expect regional
income divergence when people move from the periphery to cities. We use
distribution analysis, Kernel density functions and first order Markov
chains, to investigate whether data from Norwegian regions 1972-2008 with
strong urbanization are consistent with agglomeration effects. The analysis
shows overall income convergence, contrary to the hypothesis of agglomeration
economies. Regions with large increases in population do not show systematic
higher income growth. The probabilities of moving up and down the income
distribution are independent of the migration pattern. We conclude that
strong dynamic agglomeration effects linked to inmigration
are inconsistent with the data. |