Does Mass Immigration Destroy Institutions? 1990s Israel as a Natural Experiment

38 Pages Posted: 19 Nov 2016

See all articles by Benjamin Powell

Benjamin Powell

Texas Tech University - Free Market Institute; Texas Tech University - Rawls College of Business

J. R. Clark

The University of Tennessee at Chattanooga

Alex Nowrasteh

Cato Institute - Center for Global Liberty and Prosperity

Multiple version iconThere are 2 versions of this paper

Date Written: November 17, 2016

Abstract

The relaxation of emigration restrictions in the Soviet Union and the State’s subsequent collapse led to a large exogenous shock to Israel’s immigrant flows because Israel allows unrestricted immigration for world-wide Jews. Israel’s population increased by 20 percent in the 1990s due to immigration from the former Soviet Union. These immigrants did not bring social capital that eroded the quality of Israel’s institutional environment. We find that high quality political institutions were maintained while economic institutions improved substantially over the decade. Our case study finds that the immigrants played an active role in this institutional evolution and we also employ a synthetic control to verify that it is likely that the institutions improvement would not have occurred to the same degree without the mass migration.

Keywords: Economic Freedom, Immigration, Institutions

JEL Classification: J1, J6, P1

Suggested Citation

Powell, Benjamin and Clark, Jeff R. and Nowrasteh, Alex, Does Mass Immigration Destroy Institutions? 1990s Israel as a Natural Experiment (November 17, 2016). Available at SSRN: https://ssrn.com/abstract=2871406 or http://dx.doi.org/10.2139/ssrn.2871406

Benjamin Powell (Contact Author)

Texas Tech University - Free Market Institute ( email )

Box 45059
Lubbock, TX 79409-5059
United States
806.742.7138 (Phone)
806.742.1854 (Fax)

HOME PAGE: http://www.fmi.ttu.edu

Texas Tech University - Rawls College of Business ( email )

Lubbock, TX 79409
United States
806.834.3097 (Phone)
806.742.1854 (Fax)

Jeff R. Clark

The University of Tennessee at Chattanooga ( email )

Department of Economics
Suite 313 Fletcher Hall
Chattanooga, TN 37403-2598
United States

Alex Nowrasteh

Cato Institute - Center for Global Liberty and Prosperity ( email )

1000 Massachusetts Avenue, N.W.
Washington, DC 20001-5403
United States

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