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A Theory of Migration as a Response to Occupational Stigma

Author

Listed:
  • 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
    DOI: 10.22004/ag.econ.55363
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    References listed on IDEAS

    as
    1. Stark, Oded & Wang, You Qiang, 2005. "Towards a Theory of Self-Segregation as a Response to Relative Deprivation: Steady-State Outcomes and Social Welfare," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 223-242.
    2. 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.
    3. Keith A. Bender, 1998. "The Central Government‐Private Sector Wage Differential," Journal of Economic Surveys, Wiley Blackwell, vol. 12(2), pages 177-220, April.
    4. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
    5. Takatoshi Ito, 1997. "Purchasing Power Parity," NBER Books, National Bureau of Economic Research, Inc, number ito_97-2.
    6. Fershtman, Chaim & Weiss, Yoram, 1993. "Social Status, Culture and Economic Performance," Economic Journal, Royal Economic Society, vol. 103(419), pages 946-959, July.
    7. 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.
    8. George A. Akerlof & Rachel E. Kranton, 2000. "Economics and Identity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 715-753.
    9. 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.
    10. George A. Akerlof, 1980. "A Theory of Social Custom, of which Unemployment may be One Consequence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(4), pages 749-775.
    11. 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(1), pages 181-221.
    12. Stark, Oded & Fan, C. Simon, 2007. "The analytics of seasonal migration," Economics Letters, Elsevier, vol. 94(2), pages 304-312, February.
    13. 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.
    14. 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.
    15. 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.
    16. 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.
    17. 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.
    18. Weiss, Yoram & Fershtman, Chaim, 1998. "Social status and economic performance:: A survey," European Economic Review, Elsevier, vol. 42(3-5), pages 801-820, May.
    19. Lena Edlund & Evelyn Korn, 2002. "A Theory of Prostitution," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 181-214, February.
    20. George A. Akerlof, 2007. "The Missing Motivation in Macroeconomics," American Economic Review, American Economic Association, vol. 97(1), pages 5-36, March.
    21. 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.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Stark, Oded, 2013. "Stressful Integration," European Economic Review, Elsevier, vol. 63(C), pages 1-9.
    2. 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.
    3. 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.
    4. Stark, Oded & Byra, Lukasz, 2018. "How admitting migrants with any skills can help overcome a shortage of workers with particular skills," International Review of Economics & Finance, Elsevier, vol. 57(C), pages 144-150.
    5. 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.
    6. Oded Stark & Marcin Jakubek & Krzysztof Szczygielski, 2020. "The social preferences of the native inhabitants, and the decision how many asylum seekers to admit," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(1), pages 133-152, February.
    7. Dong, Baomin & Fu, Shihe & Gong, Jiong & Fan, Hanwen, 2014. "The Lame Drain," MPRA Paper 53825, University Library of Munich, Germany.
    8. 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.
    9. 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.
    10. Oded Stark & Fryderyk Falniowski & Marcin Jakubek, 2017. "Consensus Income Distribution," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63(4), pages 899-911, December.
    11. repec:lic:licosd:40518 is not listed on IDEAS
    12. 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 Group Publishing Limited.
    13. 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.
    14. 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).
    15. 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.
    16. Ünay Tamgaç Tezcan, 2016. "Reference Groups And Household Consumption: Evidence From Turkey," Ekonomi-tek - International Economics Journal, Turkish Economic Association, vol. 5(1), pages 71-107, January.
    17. Stark, Oded, 2017. "Possible Policy Responses to a Dark Side of the Integration of Regions and Nations," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 329-341.
    18. Stark, Oded, 2019. "Behavior in reverse: reasons for return migration," Behavioural Public Policy, Cambridge University Press, vol. 3(1), pages 104-126, May.
    19. Oded Stark & Franz Rendl & Marcin Jakubek, 2012. "The merger of populations, the incidence of marriages, and aggregate unhappiness," Journal of Evolutionary Economics, Springer, vol. 22(2), pages 331-344, April.
    20. Hasan Yuksel, 2021. "An Investigation on the Link between International Labor Migration and Undocumented Employment: Evidence from Turkish Cinema," Journal of Economy Culture and Society, Istanbul University, Faculty of Economics, vol. 64(64), pages 21-46, December.
    21. Ruxanda Berlinschi & Jan Fidrmuc, 2018. "Comfort and Conformity: A Culture-based Theory of Migration," CESifo Working Paper Series 7294, CESifo.
    22. Heiland, Inga & Kohler, Wilhelm, 2022. "Heterogeneous workers, trade, and migration," European Economic Review, Elsevier, vol. 144(C).
    23. Stark, Oded & Zawojska, Ewa & Kohler, Wilhelm & Szczygielski, Krzysztof, 2018. "An adverse social welfare effect of a doubly gainful trade," Journal of Development Economics, Elsevier, vol. 135(C), pages 77-84.
    24. Oded Stark & Marcin Jakubek & Martyna Kobus, 2015. "A bitter choice turned sweet: How acknowledging individuals’ concern at having a low relative income serves to align utilitarianism and egalitarianism," Journal of Evolutionary Economics, Springer, vol. 25(3), pages 541-557, July.
    25. Stark, Oded, 2012. "Integration, social distress, and policy formation," Economics Letters, Elsevier, vol. 115(2), pages 318-321.

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    More about this item

    Keywords

    Consumer/Household Economics; Institutional and Behavioral Economics; Labor and Human Capital;
    All these keywords.

    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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