Essays on convergence, migration and growth

This thesis consists of three essays on convergence, economic growth and migration. Chapter 1 argues that there are two common sources of inconsistency in existing cross-country empirical work on growth: correlated country effects and endogenous explanatory variables. In order to correct for these two problems, we estimate a variety of cross-country growth regressions using a generalized method of moments that produces consistent estimates. In one application, we find that per capita incomes converge to their steady state levels at a rate of approximately 10 percent per year. This result stands in sharp contrast to the current consensus, which places the convergence rate at 2 percent. We discuss the theoretical implications of this finding. We also perform a test of the Solow model. Again, contrary to prior results, we reject both the standard and the augmented versions of this model.;Chapter 3 analyzes the potential impact of migration on growth through a simple model comprised of two regions and three factors (physical capital and skilled and unskilled labor). I show that in a world of perfect capital mobility, migration will have an impact on the growth rate of the host economy only insofar as the skill mix of the migrant flow differs from that of the native labor force. Similar results obtain for the source economy. These results lead to unambiguous predictions about the impact of migration on growth. Namely, the model predicts a negative (positive) partial correlation between migration rates of unskilled (skilled) workers and per capita income growth rates. I test the model's predictions by analyzing the impact of migration on growth at the state level for the U.S. during the period 1920-70. The predictions of the model are borne out by the data. I also show that under the appropriate scenarios of capital and labor mobility, the model explains both the high correlation between domestic saving and investment rates and the absence of any cross-country absolute convergence.;Chapter 2 analyzes the characteristics of regional growth in Mexico during the period 1940-90. I found that Mexican states converged at the relatively slow rate of 1.3 percent per year during this period. However, convergence across Mexican states really took place in two stages. First, between 1940 and 1960 there was a substantial reduction in the cross-state dispersion of per capita income. Second, sometime during the 1960s the convergence process stopped. In fact, there is evidence of some divergence across regions between 1960 and 1990. I also analyzed the role of internal migration in this pattern of convergence. I found that a reduction in the responsiveness of migration to income differentials partially explains the lack of convergence in Mexican states since 1960. This chapter also discusses several concepts of convergence and their significance for regional analysis.