Oded Stark will present at the WIDER Seminar Series on 23 October 2019.
Abstract – A theory of migration as rank-seeking behavior
By now there is widespread recognition that comparisons with others impinge significantly on wellbeing and elicit substantial behavioral responses. In general, people would rather have a high income than a low income, and a high income-conferred rank rather than a low income-conferred rank. The incorporation of a dimension of relative income implies that income is valued in relation to the incomes of others with whom people naturally compare themselves (the “reference group” or the “comparison group”). In this lecture, the preference for high rank-conferred income is expressed as distaste for low rank in the income hierarchy. Engaging in interpersonal comparisons affects the individuals’ sense of wellbeing and influences their behavior, including in relation to migration. I present a first brush attempt to model the migration of an individual as a rank-seeking strategy when the individual’s rank deprivation is measured as the distance from the top rank.
In my lecture, I add three dimensions to the received literature: I model migration when the individuals’ preferences regarding their relative incomes are ordinal, I work out the resulting spatial steady-state distribution of the individuals, and I show that the aggregate of the individuals’ migration choices in the spatial steady-state distribution sums to the social optimum. I also show that this finding does not apply when the individuals’ preferences regarding their relative incomes are cardinal. I highlight the importance of the assumption about the nature of the individuals’ social preferences (whether ordinal or cardinal) to studying and predicting their migration behavior, and to elucidating the consequences of that behavior for social welfare.
About the speaker
Oded Stark is Distinguished Fellow at the Center for Development Research, University of Bonn, Distinguished Professor at the University of Warsaw, and Adjunct Professor at the University of Tuebingen. He served as Distinguished Research Scholar at Georgetown University, as University Professor (Chair in Economic and Regional Policy) at the University of Klagenfurt, and as Honorary University Professor of Economics at the University of Vienna, and prior to that as Professor of Economics (Chair in Development Economics) at the University of Oslo, and as Professor of Population and Economics and as the Director of the Migration and Development Program at Harvard University.
He has written on applied microeconomic theory, development economics, population economics, the economics of migration, labor economics, evolutionary economics, urban economics, regional economics, welfare economics, risk-taking behavior, and the theory of the firm. He is the author of the critically acclaimed books The Migration of Labor (Oxford and Cambridge, MA: Blackwell 1991 and 1993), and Altruism and Beyond, An Economic Analysis of Transfers and Exchanges Within Families and Groups (Cambridge: Cambridge University Press 1995 and 1999), and is the co-editor of the Handbook of Population and Family Economics (in Handbooks in Economics; Amsterdam: North-Holland 1997, and Beijing: Economic Science Press 2004). Oded Stark is Doctor honoris causa (University of Warsaw), a Humboldt Awardee, and a Presidential Professor of Economics (Poland).
WIDER Seminar Series
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