SABIIA - Sistema Aberto e Integrado de Informação em Agricultura (Sabiia)

Stark, Oded; Byra, Lukasz.

In this paper we study the impact of the international migration of unskilled workers on skill formation and the average skill level in the home country. We analyze what appears to be the least threatening scenario from the point of view of its effect on the supply of skills at home: namely, migration exclusively by unskilled workers. Somewhat surprisingly, we find that even without the departure of skilled workers, the home country suffers reduced aggregate skill formation. Although as a response to a higher wage rate per unit of human capital in the new equilibrium skilled workers choose to accumulate more human capital than before the opening up to migration of unskilled workers, the number and share of skilled workers in the home country’s workforce...

Tipo: Working Paper

Palavras-chave: Migration of unskilled workers; Human capital formation; Depletion of human capital; Labor and Human Capital; F22; J24; O15.

Ano: 2012

URL: http://purl.umn.edu/122433

DYNASTIES AND DESTINY: ON THE ROLES OF ALTRUISM AND IMPATIENCE IN THE EVOLUTION OF CONSUMPTION AND BEQUESTS

Stark, Oded; Falk, Ita.

We study the joint role of altruism and impatience, and the impact of evolution in the formation of long-term time preferences and in the determination of optimal consumption and optimal bequests. We show how the consumption paths of dynasties relate to altruism and to impatience, and we reason that long-lived dynasties will be characterized by a higher degree of altruism and a lower degree of impatience than short-lived dynasties.

A Reluctance to Assimilate

Palavras-chave: Institutional and Behavioral Economics.

Ano: 2001

URL: http://purl.umn.edu/18749

Quite often, migrants appear to exert little effort to absorb the mainstream culture and to learn the language of their host society, even though the economic returns (increased productivity and enhanced earnings) to assimilation are high. We show that when interpersonal comparisons affect individuals' wellbeing and when a more intensive assimilation results in migrants' comparing themselves more with the richer natives and less with fellow migrants, then the effort extended to assimilate will be muted.

TALES OF MIGRATION WITHOUT WAGE DIFFERENTIALS: INDIVIDUAL, FAMILY, AND COMMUNITY CONTEXTS

Palavras-chave: Labor and Human Capital.

Ano: 2006

URL: http://purl.umn.edu/7125

By means of examples that pertain to individual, family,and community contexts, it is shown that migration between locations is compatible with a zero expected net earnings differential between locations. The examples give rise to testable predictions that differ sharply from the predictions that emanate from a standard postulate of earnings differential.

Palavras-chave: Labor and Human Capital.

Ano: 2003

URL: http://purl.umn.edu/18743

COOPERATION AND WEALTH

We calculate the equilibrium fraction of cooperators in a population in which payoffs accrue from playing a single-shot prisoner's dilemma game. Individuals who are hardwired as cooperators or defectors are randomly matched into pairs, and cooperators are able to perfectly find out the type of a partner to a game by incurring a recognition cost. We show that the equilibrium fraction of cooperators relates negatively to the population's level of wealth.

Is population growth conducive to the sustainability of cooperation?

Palavras-chave: Research Methods/ Statistical Methods.

Ano: 2003

URL: http://purl.umn.edu/18763

Stark, Oded; Jakubek, Marcin.

This paper asks whether population growth is conducive to the sustainability of cooperation. A simple model is developed in which farmers who live around a circular lake engage in trade with their adjacent neighbors. The payoffs from this activity are governed by a prisoner’s dilemma “rule of engagement.” Every farmer has one son when the population is not growing, or two sons when it is growing. In the former case, the son takes over the farm when his father dies. In the latter case, one son stays on his father’s farm, whereas the other son settles around another lake, along with the “other” sons of the other farmers. During his childhood, each son observes the strategies and the payoffs of his father and of the trading partners of his father, and...

RETHINKING THE BRAIN DRAIN

Palavras-chave: Population growth; Imitation; Sustainability of cooperation; Community/Rural/Urban Development; Farm Management; Institutional and Behavioral Economics; Land Economics/Use; Production Economics; Productivity Analysis; C72; D01; D83; J19; J62; R12; R23.

Ano: 2011

URL: http://purl.umn.edu/109965

When productivity is fostered by both the individual's human capital and by the average level of human capital in the economy, individuals under-invest in human capital. A strictly positive probability of migration to a richer country, by raising both the level of human capital formed by optimizing individuals in the home country and the average level of human capital of non-migrants in the country, can enhance welfare and nudge the economy toward the social optimum. Under a well-controlled restrictive migration policy the welfare of all workers is higher than in the absence of this policy.

Why would some migrants choose to engage in degrading work?

Palavras-chave: Labor and Human Capital.

Ano: 2003

URL: http://purl.umn.edu/18770

This paper develops a model of voluntary migration into degrading work. The essence of the model is a tension between two “bads:” that which arises from being relatively deprived at home, and that which arises from engaging in humiliating work away from home. Balancing between these two “bads” can give rise to an explicit, voluntary choice to engage in humiliating work. The paper identifies conditions under which a migrant will choose to engage in degrading work rather than being forced into it, to work abroad as a prostitute, say, rather than on a farm. The paper delineates the possible equilibria and finds that greater relative deprivation will make it more likely that the equilibrium outcome will be “engagement in prostitution.” It is shown that under...

Policy responses to a dark side of the integration of regions and nations

Palavras-chave: Migrants; Relative deprivation; Degrading work; Humiliation; Multiple equilibria; Welfare assessment; Policy implications; Labor and Human Capital; Political Economy; F22; J24; J81.

Ano: 2011

URL: http://purl.umn.edu/101648

In this paper I study policy responses to an increase in post-merger distress. I consider the integration of regions and nations as a merger of populations which I view as a revision of social space, and I identify the effect of the merger on aggregate distress. The paper is based on the premise that the merger of groups of people alters their social landscape and their comparators. Employing a specific measure of social distress that is based on the sensing of relative deprivation, a merger increases aggregate distress: the social distress of a merged population is greater than the sum of the social distress of the constituent populations when apart. In response, policies are enacted to ensure that aggregate distress and/or that of individuals does not...

Tipo: Working Paper

Palavras-chave: Merger of populations; Revision of social space; Aggregate relative deprivation; Societal distress; Policy responses; Community/Rural/Urban Development; Labor and Human Capital; D04; D63; F55; H53; P51.

Ano: 2012

URL: http://purl.umn.edu/122036

OVERLAPPING

Wang, Yong; Stark, Oded.

We propose a new microeconomic explanation for the divergent experiences of economies in forming human capital. We suggest that the positive effect of a longer life expectancy on human capital formation arises from two separate effects: a life expectancy effect and a prolonged intergenerational overlap effect. We argue that the duration of the overlap between generations and the associated parental support can affect the marginal cost of human capital formation and hence its level: parental support is cheaper than market financing. We thus attribute the strong correlation between the formation of human capital and life expectancy not merely to a higher marginal benefit arising from a longer payback period but also to a lower marginal cost arising from a...

Work Effort, Moderation in Expulsion, and Illegal Migration

Palavras-chave: Labor and Human Capital.

Ano: 2002

URL: http://purl.umn.edu/18765

Illegal migrants supply a valuable productive input: effort. But their status as illegals means that these migrants face a strictly positive probability of expulsion. A return to their country of origin entails reduced earnings when the wage at origin is lower than the wage at destination. This prospect induces illegal migrants to exert more work effort than comparable workers who face no such prospect. The lower the probable, alternative earnings, the harsher the penalty that illegal migrants will be subjected to upon their return, for a given probability of expulsion, and the higher the level of effort they will exert at destination. While the homecountry wage that awaits the illegal migrants upon their return is exogenous to the host country, the...

Consumption Smoothing, Migration and Marriage: Evidence from Rural India

Palavras-chave: Labor and Human Capital.

Ano: 2006

URL: http://purl.umn.edu/7127

Rosenzweig, Mark R.; Stark, Oded.

Migration in India, particularly in rural areas, is dominated by the movements of women for the purpose of marriage. We seek to explain these mobility patterns by examining marital arrangements among Indian households. In particular, we hypothesize that the marrying out of daughters to locationally distant, dispersed yet kinship-related households, are manifestations of implicit inter-household contractual arrangements aimed at mitigating income risks and facilitating consumption smoothing in an environment characterized by information costs and spatially covariant risks. Analysis of longitudinal South Indian village data lends support to the hypothesis. Marriage cum migration contributes significantly to a reduction in the variability of household food...

Gauging the potential for social unrest

Palavras-chave: Consumer/Household Economics.

Ano: 1987

URL: http://purl.umn.edu/7515

Stark, Oded; Hyll, Walter; Behrens, Doris A..

It stands to reason that social unrest does not erupt out of the blue. Although there are a great many reasons why social dismay might descend into social disorder, only few yardsticks or indices can plausibly be used to gauge the potential for social unrest (PSU). If policy makers want to undertake public action to prevent social dismay escalating into social disruption, they obviously need to draw on practical sensors. This paper assesses critically the adequacy of two such measures, the polarization (P) index, and the total relative deprivation (TRD) index. The paper proposes a tentative guide to selecting between these two measures. A review of three stylized scenarios suggests that, where income redistributions reduce the number of distinct income...

Policy Repercussions of "The New Economics of the Brain Drain"

Palavras-chave: Social dismay; The potential for social unrest; Polarization; Total relative deprivation; Policy choice; Public Economics; D31; D63.

Ano: 2009

URL: http://purl.umn.edu/53721

In this paper I delineate novel policy repercussions suggested by my research on “The New Economics of the Brain Drain.” In section 1, I provide a succinct account of the model that inspires the derivation of several new policy implications. In sections 2 through 5, I present the policy implications. I address the following questions: When and how can migration to a country substitute for educational subsidies in that country? Who should be admitted when the receiving country cares about the wellbeing of the unskilled workers who stay behind in the sending country? How and why the incentives to form human capital in the sending country will have a paradoxical effect on the migration policy of the receiving country? How and why will the level of a...

Losses and Gains to Developing Countries from the Migration of Educated Workers: An Overview of Recent Research, and New Reflections

Palavras-chave: The New Economics of the Brain Drain; Policy formation; Labor and Human Capital; Political Economy.

Ano: 2010

URL: http://purl.umn.edu/98003

This paper synthesizes and extends recent research on "The New Economics of the Brain Drain." In a unified framework, the paper shows that while recently identified adverse repercussions of the brain drain exacerbate the long-recognized negative impacts of the brain drain, longer-term consequences turn the brain drain into the harbinger of powerful gains. These gains have been studied already in recent research, or merit attention in future research.

The Brain Drain, "Educated Unemployment," Human Capital Formation, and Economic Betterment

Palavras-chave: Labor and Human Capital.

Ano: 2007

URL: http://purl.umn.edu/7121

Extending both the "harmful brain drain" literature and the "beneficial brain gain" literature, this paper analyzes both the negative and the positive impact of migration by skilled individuals in a unified framework. The paper extends the received literature on the "harmful brain drain" by showing that in the short run, international migration can result in "educated unemployment" and overeducation in developing countries, as well as a brain drain from these countries. A simulation suggests that the costs of "educated unemployment" and overeducation can amount to significant losses for the individuals concerned, who may constitute a substantial proportion of the educated individuals. Adopting a dynamic framework, it is then shown that due to the positive...

An Evolutionary Edge of Knowing Less (or: On the "Curse" of Global Information)

Palavras-chave: Labor and Human Capital.

Ano: 2007

URL: http://purl.umn.edu/7122

Stark, Oded; Behrens, Doris A..

Consider a population of farmers who live around a lake. Each farmer engages in trade with his two adjacent neighbors. The trade is governed by a prisoner’s dilemma “rule of engagement.” A farmer’s payoff is the sum of the payoffs from the two prisoner’s dilemma games played with his two neighbors. When a farmer dies, his son takes over. The son decides whether to cooperate or defect by considering the actions taken and the payoffs received by the most prosperous members of the group comprising his own father and a set of his father’s neighbors. The size of this set, which can vary, is termed the “span of information.” It is shown that a larger span of information can be detrimental to the stable coexistence of cooperation and defection, and that in...

Casting the naturalization of asylum seekers as an economic problem

Palavras-chave: Span of interaction; Span of information; Imitation; Social welfare; Community/Rural/Urban Development; D83; R12; O4.

Ano: 2009

URL: http://purl.umn.edu/49924

The naturalization of asylum seekers is modeled as an economic problem. In choosing their level of investment in host-country-specific human capital, asylum seekers take into consideration the probability of their being naturalized. The government of the host country chooses the probability of naturalization that most encourages the acquisition of such human capital. That human capital, in turn, increases the asylum seekers’ productivity and earnings and, consequently, maximizes the government’s tax receipts if the asylum seekers are allowed to stay permanently. Conditions are presented under which the optimal level of investment in the host-country-specific human capital is positive, and rises in the probability of naturalization. The asylum seeker’s...

A Theory of Migration as a Response to Occupational Stigma

Palavras-chave: The probability of naturalization; Investment in host-country-specific human capital; Economic behavior of asylum seekers; Economic behavior of the government of the host country; Stackelberg game; Financial Economics; Labor and Human Capital; Political Economy; A13; F20; J24; J41; J61.

Ano: 2010

URL: http://purl.umn.edu/62160

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...

On the formation of international migration policies when no country has an exclusive policy-setting say

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

Ano: 2009

URL: http://purl.umn.edu/55363

Stark, Oded; Casarico, Alessandra; Devillanova, Carlo; Uebelmesser, Silke.

This paper identifies the migration policies that emerge when both the sending country and the receiving country wield power to set migration quotas, when controlling migration is costly, and when the decision how much human capital to acquire depends, among other things, on the migration policies. The paper analyzes the endogenous formation of bilateral agreements in the shape of transfers to support migration controls, and in the shape of joint arrangements regarding the migration policy and the cost-sharing of its implementation. The paper shows that in equilibrium both the sending country and the receiving country can participate in setting the migration policy, that bilateral agreements can arise as a welfare-improving mechanism, and that the sending...