Showing Off to the New Neighbors? Income, Socioeconomic Status and Consumption Patterns of Internal Migrants

36 Pages Posted: 11 May 2013

See all articles by Alexander M. Danzer

Alexander M. Danzer

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics; IZA Institute of Labor Economics

Barbara Dietz

Leibniz Institute for East and Southeast European Studies; IZA Institute of Labor Economics

Kseniia Gatskova

Osteuropa-Institut (OEI)

Achim Schmillen

Osteuropa-Institut (OEI); Government of the Federal Republic of Germany - Institute for Employment Research (IAB); University of Regensburg - Department of Economics and Econometrics

Abstract

This paper analyses incomes and socioeconomic status of internal migrants over time and in comparison to their new neighbors and investigates whether status consumption is a way for newly arrived city dwellers to signal their social standing. Using a novel dataset from the emerging economy of Kazakhstan we find that internal migrants earn an income and status premium for their move. In a comparison to indigenous city dwellers their earnings and household incomes are not significantly different; however, mobile households report a significantly higher subjective socio-economic status. Exploiting expenditure data, we find that recent migrant households gain status from using visible consumption to impress their new neighbors. This signaling might be used as adaptation to the new economic and social environment or to gain access to social capital.

Keywords: absolute and relative welfare, income, status consumption, signaling model, conspicuous consumption, adaptation, internal migration, emerging economy, rural-urban migration

JEL Classification: P36, I31, R23

Suggested Citation

Danzer, Alexander M. and Dietz, Barbara A. and Gatskova, Kseniia and Schmillen, Achim Daniel and Schmillen, Achim Daniel, Showing Off to the New Neighbors? Income, Socioeconomic Status and Consumption Patterns of Internal Migrants. IZA Discussion Paper No. 7370, Available at SSRN: https://ssrn.com/abstract=2263646 or http://dx.doi.org/10.2139/ssrn.2263646

Alexander M. Danzer (Contact Author)

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Barbara A. Dietz

Leibniz Institute for East and Southeast European Studies ( email )

Landshuterstraße 4
Regensburg, D-93407
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Kseniia Gatskova

Osteuropa-Institut (OEI) ( email )

Landshuter Straße 4
Regensburg, 93047
Germany

Achim Daniel Schmillen

Osteuropa-Institut (OEI) ( email )

Landshuter Str. 4
Regensburg, 93047
Germany

Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

University of Regensburg - Department of Economics and Econometrics ( email )

Universitaetsstrasse 31
D-93040 Regensburg
Germany

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