Brazilian south region municipalities economic growth: a spatial analysis

Abstract

In this paper, we analyze the determinants of labor income growth rate of Brazilian Southern municipalities in the period 1991-2000. In the estimated spatial error model, we verify that one random shock on a specific municipality in the South region propagates itself throughout the region. Besides, the estimations show that the higher are schooling and urbanization rates, the higher is the labor income growth rate. On the other hand, the smaller are number of homicides, income inequality and initial income level, the higher is the labor income growth rate of Brazilian Southern municipalities.