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Ethnic Discrimination and the Migration of Skilled Labor

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  • Frédéric Docquier
  • Hillel Rapoport

    ()
    (Department of Economics, Bar Ilan University)

Abstract

We consider a small open developing economy, whose population is bifurcated into a majority and a minority group, the latter lacking political influence. Agents are heterogeneous in skills, and decide whether to invest in education when young and whether to migrate in their adulthood. Assuming a rent-extraction basis for discrimination, we first endogenize ethnic discrimination in the benchmark case of an economy closed to migration, and then explore how migration prospects affect ethnic inequality. Under the free migration assumption, we find the intuitive result that migration prospects have a protective effect on the minority. Moreover, the optimal discrimination rate (from the majority’s perspective) is shown to be such that there is no migration at equilibrium, unless the distribution of individuals’ skills exhibits marked asymmetries. Last, we find that immigration restrictions set by receiving countries have the paradoxical effect of creating migration flows which would otherwise have remained latent.

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Bibliographic Info

Paper provided by Department of Economics, Bar-Ilan University in its series Working Papers with number 2001-19.

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Date of creation: Dec 2001
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Handle: RePEc:biu:wpaper:2001-19

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Postal: Faculty of Social Sciences, Bar Ilan University 52900 Ramat-Gan
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Fax: +972-3-7384034
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Web page: http://econ.biu.ac.il
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Keywords: Ethnic minorities; discrimination; migration; human capital formation.;

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References

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  1. Alberto Alesina & Allan Drazen, 1989. "Why are Stabilizations Delayed?," NBER Working Papers 3053, National Bureau of Economic Research, Inc.
  2. Eliakim Katz & Hillel Rapoport, 2001. "Macroeconomic Instability, Migration, and the Option Value of Education," Working Papers 2001-17, Department of Economics, Bar-Ilan University.
  3. Herschel I. Grossman & Minseong Kim, 1995. "Predation and Accumulation," NBER Working Papers 5357, National Bureau of Economic Research, Inc.
  4. Epstein, Gil S & Hillman, Arye L & Ursprung, Heinrich W, 1999. "The King Never Emigrates," Review of Development Economics, Wiley Blackwell, vol. 3(2), pages 107-21, June.
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  6. van de Walle, Dominique & Gunewardena, Dileni, 2001. "Sources of ethnic inequality in Viet Nam," Journal of Development Economics, Elsevier, vol. 65(1), pages 177-207, June.
  7. Brenner, Reuven & Kiefer, Nicholas M, 1981. "The Economics of the Diaspora: Discrimination and Occupational Structure," Economic Development and Cultural Change, University of Chicago Press, vol. 29(3), pages 517-34, April.
  8. Michel Beine & Frédéric Docquier & Hillel Rapoport, 2001. "Brain drain and economic growth: theory and evidence," ULB Institutional Repository 2013/10449, ULB -- Universite Libre de Bruxelles.
  9. Frédéric DOCQUIER & Hillel RAPOPORT, 2003. "Endogenous discrimination, migration prospects and the protection of ethnic minorities," Annales d'Economie et de Statistique, ENSAE, issue 71-72, pages 79-95.
  10. Jan Willem Gunning & Paul Collier, 1999. "Explaining African Economic Performance," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 64-111, March.
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  13. Bates, R.H., 2000. "Ethicity, Capital Formation, and Conflict," Papers 27, Chicago - Graduate School of Business.
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  15. Benhabib, Jess & Rustichini, Aldo, 1996. " Social Conflict and Growth," Journal of Economic Growth, Springer, vol. 1(1), pages 125-42, March.
  16. Bénabou, Roland, 1996. "Inequality and Growth," CEPR Discussion Papers 1450, C.E.P.R. Discussion Papers.
  17. Bardhan, Pranab, 1997. "Method in the madness? a political-economy analysis of the ethnic conflicts in less developed countries," World Development, Elsevier, vol. 25(9), pages 1381-1398, September.
  18. Richard Johnson & Julie DaVanzo, 1998. "Economic and cultural influences on the decision to leave home in Peninsular Malaysia," Demography, Springer, vol. 35(1), pages 97-114, February.
  19. Schiff, Maurice, 1998. "Ethnic Diversity and Economic Reform in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 7(3), pages 348-62, October.
  20. Roubini, Nouriel & Swagel, Phillip & Ozler, Sule & Alesina, Alberto, 1996. "Political Instability and Economic Growth," Scholarly Articles 4553024, Harvard University Department of Economics.
  21. Carrington, William J & Detragiache, Enrica & Vishwanath, Tara, 1996. "Migration with Endogenous Moving Costs," American Economic Review, American Economic Association, vol. 86(4), pages 909-30, September.
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  23. Alesina, Alberto, et al, 1996. " Political Instability and Economic Growth," Journal of Economic Growth, Springer, vol. 1(2), pages 189-211, June.
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