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Repercussions of negatively selective migration for the behavior of non-migrants when preferences are social

Published online by Cambridge University Press:  12 April 2019

Oded Stark  and
Wiktor Budzinski
Oded Stark*
Affiliation:
Universities of Bonn and Warsaw
Wiktor Budzinski
Affiliation:
University of Warsaw
*
*Corresponding author. Email: ostark@uni-bonn.de
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Abstract

We study how the work effort and output of non-migrants in a village economy are affected when a member of the village population migrates. Given that individuals dislike low relative income, and that migration modifies the social space of the non-migrants, we show why and how the non-migrants adjust their work effort and output in response to the migration-generated change in their social space. When migration is negatively selective such that the least productive individual departs, the output of the non-migrants increases. While as a consequence of this migration statically calculated average productivity rises, we identify a dynamic repercussion that compounds the static one.

Keywords

Social preferencesDistaste for low relative incomeWork effortPer capita outputMigration

JEL classification

O15: Human Resources • Human Development • Income Distribution • Migration D31: Personal Income, Wealth, and Their Distributions D01: Microeconomic Behavior: Underlying Principles J24: Human Capital • Skills • Occupational Choice • Labor Productivity
Type
Research Papers
Information
Journal of Demographic Economics , Volume 85 , Issue 2 , June 2019 , pp. 165 - 179
Copyright
Copyright © Université catholique de Louvain 2019 

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Footnotes

We are indebted to two Reviewers for advice and guidance. Oded Stark acknowledges with gratitude support of the Korea Institute for International Economic Policy.

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