Immigration and socioeconomic gaps: theory and applications

During the first decade of Israel's existence large waves of immigrants came from Europe and the Middle East. This paper introduces an empirical study which compares the occupational socioeconomic score differentials between ethnic groups within and outside the kibbutz. The three groups examined are from Asia and Africa, from Europe and America, and the native-born population. It is found that the occupational socioeconomic score differentials after migration are lower in the kibbutz than outside it and that socioeconomic gaps outside the kibbutz increase after migration. In this paper, a model is presented which explains the empirical results. It compares the effects of migration inside the kibbutz, organized as a labour-managed firm, with the effects of migration inside the city, assumed to be organized as a perfectly competitive firm. The model also develops a gap function that quantifies the socioeconomic gaps and uses iso-gap curves to compare the premigration and postmigration gaps.