Regional Migration, Growth and Convergence - A Spatial Dynamic Panel Model of Germany

This paper empirically analyses the question of how regional migration affects regional convergence and growth in post-reunification Germany. Addressing the endogeneity of migration and human capital, a dynamic panel data model within the framework of beta-convergence is applied, accounting for spatial effects. The regressions indicate that out-migration has a negative but modest effect on regional growth; the expected effect of skill selection is only partly confirmed. In the East German subsample, in-migration increases growth independently of its human capital effect; in West Germany, in-migration lowers growth per se, but this negative impact is offset by the growth-stimulating forces of migrants' skills.