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A Theory of Migration as a Response to Occupational Stigma

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  • Stark, Oded
  • Fan, C. Simon

Abstract

Drawing on the literature of occupational status and social distance, a theory is developed of labor migration that is prompted by a desire to avoid “social humiliation.” A closed-economy general equilibrium model that incorporates occupational status and examines the interaction between the goods market and the labor market is constructed. This framework is then extended from a closed, single economy to an open economy setting in a world that consists of two countries or two regions. It is shown that as long as migration can reduce humiliation sufficiently, migration will occur even between two identical economies. Hence, a new model of migration is presented in which migration arises from a wish to reap social exposure gains. The model shows that migration increases the number of individuals who choose to perform degrading jobs and that consequently, migration lowers the price of the good produced in the sector that is associated with low social status. Moreover, the more migration reduces the “humiliation” of performing degrading jobs, the larger the number of individuals who end up choosing such jobs, and the lower the wage in that sector. Finally, a welfare analysis is conducted, comparing the level of wellbeing in an open economy with the level of wellbeing in a closed economy. It is shown that the greater an individual’s aversion to performing degrading jobs, the more likely it is that he will experience a welfare gain when the economy opens up.

Suggested Citation

  • Stark, Oded & Fan, C. Simon, 2009. "A Theory of Migration as a Response to Occupational Stigma," Discussion Papers 55363, University of Bonn, Center for Development Research (ZEF).
  • Handle: RePEc:ags:ubzefd:55363
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    References listed on IDEAS

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    1. Bender, Keith A, 1998. " The Central Government-Private Sector Wage Differential," Journal of Economic Surveys, Wiley Blackwell, vol. 12(2), pages 177-220, April.
    2. Fershtman, Chaim & Weiss, Yoram, 1993. "Social Status, Culture and Economic Performance," Economic Journal, Royal Economic Society, vol. 103(419), pages 946-959, July.
    3. Luis Diaz-Serrano & Joop Hartog & Helena Skyt Nielsen, 2008. "Compensating Wage Differentials for Schooling Risk in Denmark," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(4), pages 711-731, December.
    4. Emilia Del Bono & Andrea Weber, 2008. "Do Wages Compensate for Anticipated Working Time Restrictions? Evidence from Seasonal Employment in Austria," Journal of Labor Economics, University of Chicago Press, vol. 26, pages 181-221.
    5. Oded Stark & Christian Helmenstein & Yury Yegorov, 1997. "Migrants' Savings, Purchasing Power Parity, and the Optimal Duration of Migration," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 4(3), pages 307-324, July.
    6. Weiss, Yoram & Fershtman, Chaim, 1998. "Social status and economic performance:: A survey," European Economic Review, Elsevier, vol. 42(3-5), pages 801-820, May.
    7. Paul Gertler & Manisha Shah & Stefano M. Bertozzi, 2005. "Risky Business: The Market for Unprotected Commercial Sex," Journal of Political Economy, University of Chicago Press, vol. 113(3), pages 518-550, June.
    8. Stark, Oded & Micevska, Maja & Mycielski, Jerzy, 2009. "Relative poverty as a determinant of migration: Evidence from Poland," Economics Letters, Elsevier, vol. 103(3), pages 119-122, June.
    9. Stark, Oded & You Qiang Wang, 2002. "A Theory of Self-Segregation as a Response to Relative Deprivation," Royal Economic Society Annual Conference 2002 168, Royal Economic Society.
    10. Gary S. Becker & Kevin M. Murphy & Ivan Werning, 2005. "The Equilibrium Distribution of Income and the Market for Status," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 282-310, April.
    11. Cole, Harold L & Mailath, George J & Postlewaite, Andrew, 1992. "Social Norms, Savings Behavior, and Growth," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1092-1125, December.
    12. Lena Edlund & Evelyn Korn, 2002. "A Theory of Prostitution," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 181-214, February.
    13. Rosenzweig, Mark R & Stark, Oded, 1989. "Consumption Smoothing, Migration, and Marriage: Evidence from Rural India," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 905-926, August.
    14. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
    15. Takatoshi Ito, 1997. "Purchasing Power Parity," NBER Books, National Bureau of Economic Research, Inc, number ito_97-2, June.
    16. George A. Akerlof & Rachel E. Kranton, 2000. "Economics and Identity," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 715-753.
    17. George A. Akerlof, 1980. "A Theory of Social Custom, of which Unemployment may be One Consequence," The Quarterly Journal of Economics, Oxford University Press, vol. 94(4), pages 749-775.
    18. Stark, Oded & Fan, C. Simon, 2007. "The analytics of seasonal migration," Economics Letters, Elsevier, vol. 94(2), pages 304-312, February.
    19. Stark, Oded & Taylor, J Edward, 1991. "Migration Incentives, Migration Types: The Role of Relative Deprivation," Economic Journal, Royal Economic Society, vol. 101(408), pages 1163-1178, September.
    20. Richard J. Butler & John D. Worrall, 2008. "Wage and Injury Response to Shifts in Workplace Liability," ILR Review, Cornell University, ILR School, vol. 61(2), pages 181-200, January.
    21. George A. Akerlof, 2007. "The Missing Motivation in Macroeconomics," American Economic Review, American Economic Association, vol. 97(1), pages 5-36, March.
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    Citations

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    Cited by:

    1. Stark, Oded & Fan, C. Simon, 2011. "Migration for degrading work as an escape from humiliation," Journal of Economic Behavior & Organization, Elsevier, vol. 77(3), pages 241-247, March.
    2. Stark, Oded & Jakubek, Marcin & Falniowski, Fryderyk, 2014. "Reconciling the Rawlsian and the utilitarian approaches to the maximization of social welfare," Economics Letters, Elsevier, vol. 122(3), pages 439-444.
    3. Oded Stark & Marcin Jakubek, 2016. "Can a Concern for Status Reconcile Diverse Social Welfare Programs?," Research on Economic Inequality,in: Inequality after the 20th Century: Papers from the Sixth ECINEQ Meeting, volume 24, pages 235-246 Emerald Publishing Ltd.
    4. Stark, Oded & Byra, Lukasz & Casarico, Alessandra & Uebelmesser, Silke, 2017. "A critical comparison of migration policies: Entry fee versus quota," Regional Science and Urban Economics, Elsevier, vol. 66(C), pages 91-107.
    5. Stark, Oded & Falniowski, Fryderyk & Jakubek, Marcin, 2016. "Consensus income distribution," Discussion Papers 250120, University of Bonn, Center for Development Research (ZEF).
    6. Oded Stark & Walter Hyll & Yong Wang, 2012. "Endogenous Selection of Comparison Groups, Human Capital Formation, and Tax Policy," Economica, London School of Economics and Political Science, vol. 79(313), pages 62-75, January.
    7. Stark, Oded & Zawojska, Ewa & Kohler, Wilhelm & Szczygielski, Krzysztof, 2018. "An adverse social welfare effect of a doubly gainful trade," University of Tuebingen Working Papers in Economics and Finance 106, University of Tuebingen, Faculty of Economics and Social Sciences.
    8. Stark, Oded, 2013. "Stressful Integration," European Economic Review, Elsevier, vol. 63(C), pages 1-9.
    9. Dong, Baomin & Fu, Shihe & Gong, Jiong & Fan, Hanwen, 2014. "The Lame Drain," MPRA Paper 53825, University Library of Munich, Germany.
    10. repec:bla:econom:v:84:y:2017:i:336:p:647-666 is not listed on IDEAS
    11. Stark, Oded & Kobus, Martyna & Jakubek, Marcin, 2012. "A concern about low relative income, and the alignment of utilitarianism with egalitarianism," Economics Letters, Elsevier, vol. 114(3), pages 235-238.
    12. Sorger, Gerhard & Stark, Oded, 2013. "Income redistribution going awry: The reversal power of the concern for relative deprivation," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 1-9.
    13. Nina Neubecker, 2013. "Low Occupational Prestige and Internal Migration in Germany," SOEPpapers on Multidisciplinary Panel Data Research 562, DIW Berlin, The German Socio-Economic Panel (SOEP).
    14. repec:tek:journl:v:5:y:2016:i:1:p:71-107 is not listed on IDEAS
    15. Stark, Oded, 2012. "Integration, social distress, and policy formation," Economics Letters, Elsevier, vol. 115(2), pages 318-321.
    16. Inga Heiland & Wilhelm Kohler, 2013. "Heterogeneous Workers, Trade, and Migration," CESifo Working Paper Series 4387, CESifo Group Munich.
    17. repec:bla:revinw:v:63:y:2017:i:4:p:899-911 is not listed on IDEAS
    18. Oded Stark, 2017. "Migration when Social Preferences are Ordinal: Steady-state Population Distribution and Social Welfare," Economica, London School of Economics and Political Science, vol. 84(336), pages 647-666, October.

    More about this item

    Keywords

    Migration; Social distance; Occupational status; Social exposure gains; General equilibrium; Consumer/Household Economics; Institutional and Behavioral Economics; Labor and Human Capital; F22; J61; R23;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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