Working Paper: CEPR ID: DP1815
Authors: Gil S. Epstein; Arye L. Hillman; Heinrich W. Ursprung
Abstract: We consider a country where a king assigns benefits in accordance with privilege determined by the population?s proximity to the throne. People have different relative advantages in seeking privilege and in productive activity. The nature of the contest for privilege determines whether, in equilibrium, the more productive or less productive in society are located closer to the king, and thus who has an incentive to emigrate. When contests for privilege are ?easy?, the more productive are furthest from the king and emigrate first. When contests are ?difficult?, the least productive emigrate first. In either case, the population unravels, although emigration is bounded.
Keywords: migration; contests; privilege seeking
JEL Codes: F22; H2; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| political culture (D72) | privilege (P14) |
| privilege (P14) | productivity (O49) |
| privilege (P14) | emigration incentives (J61) |
| emigration incentives (J61) | emigration patterns (F22) |
| easy contests for privilege (D72) | emigration of productive individuals (F22) |
| difficult contests for privilege (D72) | emigration of least productive individuals (F22) |
| emigration of productive individuals (F22) | impoverishment of king's domain (H13) |
| privilege distribution (D30) | emigration (F22) |
| emigration (F22) | adverse selection (D82) |
| adverse selection (D82) | shrinking tax base (H26) |