Distribution of Entrepreneurial Skills and Migration: Employment Structure, Income Inequality, and Welfare

Dmitry Pokrovsky and Alexander Shapoval

Journal of the New Economic Association, 2015, vol. 26, issue 2, 36-62

Abstract: The authors define a general equilibrium model with heterogeneous individuals who are endowed with identical preferences, given by the utility function with constant elasticity of substitution (CES), and with heterogeneous entrepreneurial skills. We find that scale effects linked to migration can be analyzed within the framework of the constructed model because the migration changes the market size together with a market structure. A population growth due to immigration of lowqualified individuals ambiguously affects the share of reciprocal to entrepreneurial and the inequality in the economy. If the distribution of the inverse entrepreneurial skills has an increasing (decreasing, constant) elasticity, then decreases (increases, and does not change) and the Gini coefficient increases (decreases and does not change).

Keywords: monopolistic competition; heterogeneous consumers; entrepreneurship; migration; income inequality; welfare (search for similar items in EconPapers)
JEL-codes: D31 D43 J24 L11 O15 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:nea:journl:y:2015:i:26:p:36-62

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