'Growth with equality' and regional development : distributional consequences of agglomeration in Taiwan

This study investigates long-term distributional effects of regional agglomeration. We analyse changes in relative incomes for different educational and occupational categories in Taiwan from 1976 to 2006, a period during which the country underwent fundamental structural change from labour-intensive to knowledge-intensive industry and increasing globalisation of the economy. Long-term patterns derived from repeated estimations of cross-sectional micro-level data from 31 consecutive annual household surveys show that less-educated groups are not systematic losers of the transformation as positive externalities of agglomeration are both significant and widespread in the leading region. The famous pattern of ‘growth with equity’ in Taiwan has, however, become a regional rather than a national feature. (J Asia Pac Econ/GIGA)