The persistence of apartheid regional wage disparities in South Africa

In this article, we use a new economic geography (NEG) model to estimate the extent to which the persistence in apartheid regional wage disparities in South Africa is an outcome of economic forces such as market access. We estimate a structural wage equation derived directly from the NEG theory for 354 regions over the period 1996 to 2011. We find support for an augmented NEG model in explaining regional wage disparities across regions in South Africa, although the market access effects are highly localised in view of high distance coefficients. We also find, even after controlling for NEG and other region-specific characteristics, a persistent wage deficit in the former homelands, where under apartheid black South Africans were forcefully relocated according to their ethnic groups. Average wages of workers in homelands remained approximately 17% lower than predicted between 1996 and 2011, despite the reintegration of these regions into South Africa and the implementation of regional policies after the end of apartheid.

Can we use NEG models to predict migration flows? An example of CEE accession countries

In this paper I develop an analytically solvable and structurally estimable economic geography model and apply it to predict migration flows for the period following the CEE's integration with the EU. The main innovation of my approach is that it endogenises both, explanatory variables and the migration rate. Model's parameters are estimated econometrically using a structural equation, which is derived entirely from the theoretical NEG model. My empirical findings advocate that there is enough evidence to predict a selective migration among the three Baltic States. However, labour mobility in the Baltic countries is sufficiently low to make the swift emergence of a core-periphery pattern very unlikely at this geographical level.