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Distribution of Entrepreneurial Skills and Migration: Employment Structure, Income Inequality, and Welfare

Author

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  • Pokrovsky, D.

    (National Research University Higher School of Economics, Moscow, Russia)

  • Shapoval, A.

    (University under the Government of the Russian Federation, Moscow, Russia
    National Research University Higher School of Economics, Moscow, Russia
    Center for the Study of Diversity and Social Interactions, Moscow, Russia)

Abstract

The authors define a general equilibrium model with heterogeneous individuals who are endowed with identical preferences, given by the utility function with constant elasticity of substitution (CES), and with heterogeneous entrepreneurial skills. We find that scale effects linked to migration can be analyzed within the framework of the constructed model because the migration changes the market size together with a market structure. A population growth due to immigration of lowqualified individuals ambiguously affects the share of reciprocal to entrepreneurial and the inequality in the economy. If the distribution of the inverse entrepreneurial skills has an increasing (decreasing, constant) elasticity, then decreases (increases, and does not change) and the Gini coefficient increases (decreases and does not change).

Suggested Citation

  • Pokrovsky, D. & Shapoval, A., 2015. "Distribution of Entrepreneurial Skills and Migration: Employment Structure, Income Inequality, and Welfare," Journal of the New Economic Association, New Economic Association, vol. 26(2), pages 36-62.
    • Handle: RePEc:nea:journl:y:2015:i:26:p:36-62
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    References listed on IDEAS

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    1. Goncharenko, V. & Shapoval, A., 2018. "Impact of Demand Structure and Market Size on Unemployment, Income Inequality and Social Welfare," Journal of the New Economic Association, New Economic Association, vol. 37(1), pages 12-33.
    2. Achkasov, Yu. & Pilnik, P., 2017. "Income Tax Effect on Economic Performance in Terms of Endogenous Choice between Labor and Enterprise Market," Journal of the New Economic Association, New Economic Association, vol. 33(1), pages 12-27.

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    More about this item

    Keywords

    monopolistic competition; heterogeneous consumers; entrepreneurship; migration; income inequality; welfare;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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