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When is "Too Much" Inequality Not Enough? The Selection of Israeli Emigrants


  • Eric Gould

    () (Hebrew University, Shalem Center, CEPR, and IZA)

  • Omer Moav

    () (Hebrew University, Royal Holloway University of London, Shalem Center, and CEPR)


This paper examines the effect of inequality on the incentives to emigrate according to a person's education and unobservable skills (residual wage). Borjas (1987) shows that higher skilled individuals are more likely to emigrate than lower skilled individuals when the returns to skill are higher in a potential foreign destination. Using a unique data set on Israeli emigrants, we show that the probability of emigrating indeed increases monotonically with education. However, the relationship between residual wages and emigration rates exhibits an inverse u-shaped pattern. We build a model to explain both of these patterns by incorporating the idea that education is a "general" skill which can be transferred to a foreign country, but residual wages are composed of "general" and "country-specific skills" which are not easily transferable. We test the model's predictions by exploiting variation in the patterns of emigration across industries and occupations. Our findings are consistent with the theory, and therefore, highlight the importance of differentiating between general and "country-specific" skills in order to understand emigrant selection.

Suggested Citation

  • Eric Gould & Omer Moav, 2010. "When is "Too Much" Inequality Not Enough? The Selection of Israeli Emigrants," CReAM Discussion Paper Series 1014, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  • Handle: RePEc:crm:wpaper:1014

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    References listed on IDEAS

    1. Michèle V. K. Belot & Timothy J. Hatton, 2012. "Immigrant Selection in the OECD," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(4), pages 1105-1128, December.
    2. Ran Abramitzky, 2008. "The Limits of Equality: Insights from the Israeli Kibbutz," Discussion Papers 07-048, Stanford Institute for Economic Policy Research.
    3. Randall Akee, 2010. "Who Leaves? Deciphering Immigrant Self-Selection from a Developing Country," Economic Development and Cultural Change, University of Chicago Press, vol. 58(2), pages 323-344, January.
    4. Ben-David, Dan, 2008. "Brain Drained: A Tale of Two Countries," CEPR Discussion Papers 6717, C.E.P.R. Discussion Papers.
    5. Ran Abramitzky, 2008. "The Limits of Equality: Insights from the Israeli Kibbutz," The Quarterly Journal of Economics, Oxford University Press, vol. 123(3), pages 1111-1159.
    6. Borjas, George J. & Bronars, Stephen G. & Trejo, Stephen J., 1992. "Self-selection and internal migration in the United States," Journal of Urban Economics, Elsevier, vol. 32(2), pages 159-185, September.
    7. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier.
    8. Cobb-Clark, Deborah A, 1993. "Immigrant Selectivity and Wages: The Evidence for Women," American Economic Review, American Economic Association, vol. 83(4), pages 986-993, September.
    9. Pablo Ibarraran & Darren Lubotsky, 2007. "Mexican Immigration and Self-Selection: New Evidence from the 2000 Mexican Census," NBER Chapters,in: Mexican Immigration to the United States, pages 159-192 National Bureau of Economic Research, Inc.
    10. Orrenius, Pia M. & Zavodny, Madeline, 2005. "Self-selection among undocumented immigrants from Mexico," Journal of Development Economics, Elsevier, vol. 78(1), pages 215-240, October.
    11. David McKenzie & Hillel Rapoport, 2010. "Self-Selection Patterns in Mexico-U.S. Migration: The Role of Migration Networks," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 811-821, November.
    12. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
    13. Daniel Chiquiar & Gordon H. Hanson, 2005. "International Migration, Self-Selection, and the Distribution of Wages: Evidence from Mexico and the United States," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 239-281, April.
    14. Gordon B. Dahl, 2002. "Mobility and the Return to Education: Testing a Roy Model with Multiple Markets," Econometrica, Econometric Society, vol. 70(6), pages 2367-2420, November.
    15. A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
    16. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade, and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1, January.
    17. Barry Chiswick, 1999. "Are Immigrants Favorably Self-Selected?," American Economic Review, American Economic Association, vol. 89(2), pages 181-185, May.
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    Cited by:

    1. Rienzo, Cinzia, 2008. "Residual Wage Inequality and Immigration in the UK and the US," MPRA Paper 30279, University Library of Munich, Germany, revised Mar 2011.
    2. Dustmann, Christian & Glitz, Albrecht, 2011. "Migration and Education," Handbook of the Economics of Education, Elsevier.
    3. Ran Abramitzky & Leah Platt Boustan & Katherine Eriksson, 2012. "Europe's Tired, Poor, Huddled Masses: Self-Selection and Economic Outcomes in the Age of Mass Migration," American Economic Review, American Economic Association, vol. 102(5), pages 1832-1856, August.
    4. Michael Clemens & Claudio Montenegro & Lant Pritchett, 2008. "The Place Premium: Wage Differences for Identical Workers across the U.S. Border," Working Papers 148, Center for Global Development.
    5. Mountford, Andrew & Rapoport, Hillel, 2011. "The brain drain and the world distribution of income," Journal of Development Economics, Elsevier, vol. 95(1), pages 4-17, May.
    6. Ran Abramitzky & Leah Platt Boustan, 2016. "Immigration in American Economic History," NBER Working Papers 21882, National Bureau of Economic Research, Inc.
    7. Adnan, Wifag, 2015. "Who gets to cross the border? The impact of mobility restrictions on labor flows in the West Bank," Labour Economics, Elsevier, vol. 34(C), pages 86-99.
    8. Dustmann, Christian & Fadlon, Itzhak & Weiss, Yoram, 2011. "Return migration, human capital accumulation and the brain drain," Journal of Development Economics, Elsevier, vol. 95(1), pages 58-67, May.

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    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers


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