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

40 Pages Posted: 18 Feb 2017

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: January 12, 2017

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 economic institutions improved substantially over the decade. Our synthetic control methodology indicates that it is likely that the institutional improvement would not have occurred to the same degree without the mass migration. Our case study indicates that immigrant participation in the political process is the main mechanism through which the migration caused institutional change.

Keywords: Soviet Union, Israel, Economic Institutions, Mass Migration, Refugees, Immigration

JEL Classification: F0, F6

Suggested Citation

Powell, Benjamin and Clark, Jeff R. and Nowrasteh, Alex, Does Mass Immigration Destroy Institutions? 1990s Israel As a Natural Experiment (January 12, 2017). Cato Institute Working Paper No. 41. Available at SSRN: https://ssrn.com/abstract=2919469 or http://dx.doi.org/10.2139/ssrn.2919469

Benjamin Powell

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 (Contact Author)

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

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

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