caa a22 4500 475838580 CHVBK 20180406123855.0 cr unu---uuuuu 170329e20000301xx s 000 0 eng 10.1007/s001680050130 doi (NATIONALLICENCE)springer-10.1007/s001680050130 A labor market based theory of regional economic development [Elektronische Daten] [Vijay K. Mathur, Frank M. Song] Abstract.: The Borts and Stein (1964) theory of regional economic growth and development has been widely accepted and discussed in regional economic development literature. Given their assumption that labor demand conditions are invariant between regions and that the labor demand is highly wage elastic, they conclude that regional growth is primarily supply driven and differences in growth among regions arise due to differences in the growth of labor supply assuming that wage elasticity of labor supply is the same across regions. Muth (1968, 1971) claims to have verified the Borts and Steins (BS) conclusion. We propose a regional labor market based model of economic development similar to BS with certain modifications in assumptions and show that the Borts-Stein-Muth (BSM) conclusion is based upon a narrow view of labor demand and supply elasticities. Our theory demonstrates that regional development is mainly labor demand driven once we adopt a broader view of elasticities. The broader view incorporates the direct effect of wages on labor supply and labor demand as well as the indirect effects of wages through changes in inmigration and firms' formations in a region. Springer-Verlag Berlin Heidelberg, 2000 Mathur Vijay K. Department of Economics, Cleveland State University, Cleveland, OH 44115, USA, US aut Song Frank M. Department of Economics, Cleveland State University, Cleveland, OH 44115, USA, US aut https://doi.org/10.1007/s001680050130 text/html Onlinezugriff via DOI 1 research-article jats NATIONALLICENCE 856 40 https://doi.org/10.1007/s001680050130 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Mathur Vijay K. Department of Economics, Cleveland State University, Cleveland, OH 44115, USA, US aut NATIONALLICENCE 700 1- Song Frank M. Department of Economics, Cleveland State University, Cleveland, OH 44115, USA, US aut Metadata rights reserved Springer special CC-BY-NC licence nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-springer