Social Interaction and the Minority-Majority Earnings Inequality: Why Being a Minority Hurts but being a big Minority Hurts More

Empirical findings that minorities typically attain lower economic status than majorities and that relatively larger minorities perform worse than smaller ones pose a challenge to economics.To explain this scale puzzle, I model an economy where the society is bifurcated into two social groups that differ in their size and sociocultural characteristics - the minority and the majority - and individuals form their human capital through social interaction in social networks.I establish that the different social group sizes and the sociocultural differences suffice to generate earnings inequality between the two social groups whenever sociocultural differences hinder social interaction between majority and minority individuals and there are networks effects in human capital acquisition.If there are, in addition, asymmetric information in the labor market and a choice of heterogeneous skills in the economy, minority and majority individuals tend to acquire different (combinations of) skills and the predicted patterns of income inequality comply with the scale puzzle under fairly general conditions.Moreover, in this study I offer an answer why some minorities do better than majorities, why minority individuals tend to spend more time socializing in families than in schools, and why integration may harm minorities.minority groups;inequality;human capital;incomes;labour market

Social Interaction and the Minority-Majority Earnings Inequality:Why Being a Minority Hurts but being a big Minority Hurts More

Empirical findings that minorities typically attain lower economic status than majorities and that relatively larger minorities perform worse than smaller ones pose a challenge to economics.To explain this scale puzzle, I model an economy where the society is bifurcated into two social groups that differ in their size and sociocultural characteristics - the minority and the majority - and individuals form their human capital through social interaction in social networks.I establish that the different social group sizes and the sociocultural differences suffice to generate earnings inequality between the two social groups whenever sociocultural differences hinder social interaction between majority and minority individuals and there are networks effects in human capital acquisition.If there are, in addition, asymmetric information in the labor market and a choice of heterogeneous skills in the economy, minority and majority individuals tend to acquire different (combinations of) skills and the predicted patterns of income inequality comply with the scale puzzle under fairly general conditions.Moreover, in this study I offer an answer why some minorities do better than majorities, why minority individuals tend to spend more time socializing in families than in schools, and why integration may harm minorities.

Eastern partnership migrants in Germany: outcomes, potentials and challenges

Despite the ongoing dialogue on facilitating mobility between the European Union and the Eastern Partnership (EaP) countries, very little is known about the magnitude and characteristics of migration from these countries. We find that EaP migrants experience worse labor market outcomes than other migrant groups, but current and potential migrants hold qualifications in those areas were skill shortages are expected. Therefore, the monitoring and supervision of EaP integration will be consequential in order to understand how much of the current brain waste is driven by poor assessment of foreign qualifications, and to unleash the potential of migration for the German economy

Opportunity or threat? Public attitudes towards EU Freedom of Movement

This article examines the effect of individual and contextual variables on preference formation towards European Union (EU) freedom of movement. Our multilevel analyses of Eurobarometer data show that citizens with low levels of human capital and strong feelings of national identity are more likely to oppose intra-EU migration. However, we argue that in order to fully grasp variation in public preferences, we need to consider the domestic context. Utilitarian and affective theories have more explanatory power in richer countries, but in less affluent member states support for free movement is evenly high irrespective of individual dispositions. Our findings have implications for the progress of European integration, especially at a time when the EU is in the process of deciding on a course of action about its future direction

A Sustainable Immigration Policy for the EU

A sustainable EU Immigration Policy aims to contribute to a vibrant European society through more effectively and selectively managed immigration from outside the EU, more attention to integration of immigrants, more rooting out of discrimination, more asylum centres close to areas of conflict, and more attention to education and training in areas where refugees have settled. Immigration from outside the EU is often opposed, mainly because of sluggish integration combined with tensions in actual and perceived values between immigrants and native populations. These divisions affect not only the first generation of immigrants, but also those that follow. We propose a sustainable, win-win policy fostering the benefits of immigration and in line with the preferences of EU citizens holding not only positive but also more sceptical views on immigration while relying on adherence to human rights. The proposed policy is directed towards more effectively and selectively managed immigration based on the employability potential of the immigrant, combined with more attention to integration and stricter measures to fight discrimination. We also acknowledge the need for a robust policy framework to cope with asylum and abrupt large-scale waves of refugees wanting to enter the EU, resulting from conflicts, natural catastrophes, and other sudden or violent events. We propose screening schemes for refugee camps surrounding countries they have fled to determine migrants' refugee status, channelling them either as economic migrants, selected on their employability, or through a humanitarian scheme that respects the EU's multilateral and bilateral commitments. Such a humanitarian scheme would be embedded into education-cooperation policies, to provide better opportunities to qualify for admission and substantially greater support for refugees

Five characteristics of youth unemployment in Europe

Current levels of youth unemployment need to be understood in the context of increased labor market flexibility, an expansion of higher education, youth migration, and family legacies of long-term unemployment. Compared with previous recessions, European-wide policies and investments have significantly increased with attempts to support national policies. By mapping these developments and debates, we illustrate the different factors shaping the future of European labor markets. We argue that understanding youth unemployment requires a holistic approach that combines an analysis of changes in the economic sphere around labor market flexibility, skills attainment, and employer demand, as well as understanding the impact of family legacies affecting increasingly polarized trajectories for young people today. The success of EU policy initiatives and investments will be shaped by the ability of national actors to implement these effectively