12. Migration and Regional Convergence among The Finnish Subregions, 1975-95

SARI PEKKALA AND AKI KANGASHARJU 1998. MIGRATION AND REGIONAL CONVERGENCE AMONG THE FINNISH SUBREGIONS, 1975-95. Pellervo Economic Research Institute Working Papers No. 12 (October 1998). 21 p. (Pellervo Economic Research Institute PTT, Eerikinkatu 28 A, 00180 Helsinki, Finland). ISBN 951-8950-89-X, ISSN 1455-4623. 
Abstract: This paper analyses the connection between inter-regional migration and income convergence in Finland between 1975 and 1995. Convergence of per capita incomes has been fast across the 85 subregions, especially before 1985. The effect of migration to β- and σ-convergence is analysed by cross-section and panel data methods and these estimation results are compared. In the cross-section regressions migration seems to have had a very small but divergent effect in the regional growth and convergence process, whereas the panel data model reveals a convergent role for migration in terms of both β- and σ-convergence. This finding casts doubt on the use of cross-section data, showing that by using better data and more advanced methods improved results are obtained compared to those yielded by the cross-section regressions. 
Keywords: subregions, β-convergence, σ-convergence, migration, panel data