A simple theory of permanent migrations: The case of Gypsies

João Ricardo Faria Nottingham Business School, Nottingham Trent University

Abstract: One of the main characteristics of the Gypsies is their continual mobility. The permanent migration behavior becomes a habit. This paper models permanent migrations, such as the Gypsies’, by the formation of migration habits. The model derives the optimal levels of Gypsies’ consumption, migration, migration habits and income, as a function of the importance of habits, the relative importance of recent migrations on habit formation, Gypsies’ time preference, and the marginal impacts of actual consumption and migration on consumption variation.

Keywords: Migration; Minorities; Intertemporal choice. JEL Classification Numbers: J15, J61, D99 Acknowledgements: I would like to thank, without implicating, Miguel Leon-Ledesma for useful comments. Address for Correspondence Nottingham Business School, Nottingham Trent University, Burton St., Nottingham NG1 4BU, UK. Email: [email protected]; phone: +44 (0)115-848 2762; fax: +44 (0)115 848 4707.

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A simple theory of permanent migrations: The case of Gypsies 1. Introduction In economics migration is usually understood as a result of a differential of economic opportunities between two different regions. People migrate whenever the economic opportunities are better abroad than at home. According to this view, rational economic agents calculate, taking into account the income differentials between regions [e.g., Todaro, 1969] and all relevant constraints such as costs of assimilation and risk differentials [e.g., Chiswick, 1978; Stark and Levhari, 1982; Levy and Tsur, 2002], and decide to migrate whenever total benefits are greater than total costs. Therefore the decision to migrate is endogenous. However, there are migration cases that cannot be explained by this theory. One example is given by forced migration which were triggered by exogenous forces that pushed some populations out of their homes such as the Stalinist transposition of peoples in the Soviet Union before the WWII [e.g., Faria and Mollick, 1996] or more recently the expulsion of Asians from Uganda by Idi Amin dictatorship1 motivated by political [or ideological] reasons. Another interesting type of migration is provided by nomadism, which is characterized by permanent migration. Tribes of hunter-gatherers move from region to region following the availability of resources [game and harvests] throughout the seasons [see Cabeza de Vaca, 1555], so the economic explanation addresses satisfactorily their seasonal migrations. However, there are certain kinds of nomadism that defy the explanations of migration [economic or political] presented above. The case of the Gypsies2 [or Roma, Rom3, or Romani people] is one of them. Despite the fact that in their history4 the 1 In 1972 President Idi Amin gave the 80,000-strong Asian community [65% Hindu] of Uganda ninety days in which to leave the country, after which their businesses and homes would be handed over to native Ugandans. 2 The name Gypsy is the shortening of “Egyptians”, because in the middle-ages dark-skinned people from the Middle-East had been brought to Europe before the arrival of the Roma [Gypsies, see next footnote] were loosely called "Egyptians". 3 Actually, the Rom also designate one of the three populations of Roma and refers to the Romani of western Europe, the ones that are the focus of this paper. The remaining two populations of Roma are the Dom of eastern Europe and the Lom of central Europe.

3 Gypsies have suffered innumerous persecutions and expulsions [see Hancock, 1987], no one would argue that their permanent migration pattern is always consequence of expulsions5. In the same vein, some of their migrations may have been stimulated by better economic perspectives elsewhere; nevertheless it is hard to explain their permanent migration as resulting solely from economic aspects. Therefore, no matter if in a given instant of time the migration of the Gypsies is triggered by economic reasons or forced expulsions, what makes their migration pattern different is the fact that they keep moving from one place to another mainly by their own volition. In fact, as Borrow ([1841], 1996, p. 17) pointed out: “(…) the Gypsy is like Cain, a wanderer of the earth; for in England the covered cart and the little tent are the houses of the Gypsy, and he seldom remains more than three days in the same place”

the citation above conveys the idea that the Gypsies, at least whenever possible, migrate for the sake of migration. It is as if migration creates a habit that ends up characterizing the people as a whole: Gypsies to be Gypsies need to migrate and keep migrating. This leads to the idea that Gypsies derive satisfaction from migration and the habits associated with it. The reason for this may lay in the fact that Gypsies value "freedom" a lot. Settling in a specific place or country would imply, on the one hand, in investing in fixed capital, such as real states, houses, etc, and, on the other hand, would imply in mixing with other people and therefore taking the risk to dilute their culture and heritage6. Indeed, many aspects, if not the main traits, of their culture are permeated or can be traced back to their previous migrations7.

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See Hancok (2002) for a history of the Rom. Lee (1998) provides a short account of their history. The Roma of Romania were enserfed [e.g., Prodan, 1990] [from around 1500 to 1864] and of course were less mobile than the other Roma populations in Europe. Other episodes of enslavement of Roma, for shorter periods, occurred in Spain and Portugal and some of their American colonies [Hancock, 1997]. 6 Beynon (1936) exposes the view that Gypies are pariahs, as a consequence they live socially and spatially on the periphery of the community in which they make their living. 7 This certainly holds true for their language that borrowed words and terms from many countries were they lived for a while. It is also acknowledged by The Patrin Web Journal (1999) that Romani customs and traditions are as diverse as the number of Roma nations and the countries they inhabit. Romani culture is diverse and there is no universal culture per se, but there are attributes common to all Roma: loyalty to family (extended and clan); belief in Del (God) and beng (the Devil); belief in predestiny; Romaniya, standards and norms, varying in degree from tribe to tribe; and adaptability to changing conditions. Integration of many Roma into gajikané (non-Roma, or foreign) culture due to settlement has diluted many Romani cultural values and beliefs. Not all tribes have the same definition of who and what is "Roma." 5

4 This is exactly the insight of this paper. It explains permanent migrations, such as the Gypsies’, through the simple idea of habit formation [e.g., Duesenberry, 1949]. Departing from the focus on consumption, Faria and León-Ledesma (2004) extended the idea of habit formation to describe the formation of working habits, which helps explain many observed cultural differences towards attitudes to work. The present paper reinforces the view that the habit formation idea should not be confined to consumption but can and should be applied to other economic variables. Here, the hypothesis of habit formation is extended to study the formation of migration patterns, in particular, permanent migration.

2. The Model The representative agent is the chief of a clan of Gypsies. He cares about migration and the habits associated with it, because these habits constitute great part of their culture. As exposed in the introduction, what characterizes Gypsies is their mobility. Thus Gypsies derive satisfaction from migration (M) and migration habits (H). This idea is captured by the following instantaneous utility function: U ( M , H ) = ln M + γ ln H , where γ indexes the importance of migration habits. Migration habits are acquired by past migration, and in line with the literature [e.g., Carroll et al., 2000], the stock of migration habits is a weighted average of past migrations. The time variation of the stock of migration habits is: •

H = ρ[ M − H ] •

where X ≡

(1)

dX denotes the time variation of variable X, and ρ>0 stands for the relative dt

weights of migration at different times. A larger ρ indicates that recent migration is more important in habit formation than past migrations. In this model, the consumption pattern of Gypsies is not a choice variable. Provided that Gypsies have to migrate and keep migrating, their consumption pattern is beyond their control, since it varies with the economic conditions from place to place. In this sense we assume that Gypsies’ consumption is a state variable that evolves according to two factors: actual consumption (C) and migration (M). As migration involves costs, they are reflected negatively on the evolution of Gypsies’ consumption and captured by

5 parameter b. We also assume, in line with the increase in the standard of living of western Europe over the past 500 years, that in the absence of migration [i.e., b=0], the rate of growth of Gypsies’ consumption would be positive and, for simplicity, constant and equal to a. Therefore, the evolution of Gypsies’ consumption is described by the following expression: •

C = aC − bM

(2)

The representative Gypsy maximizes a discounted, infinite stream of ∞

utility: Max ∫ [ln M + γ ln H ] e − θ t dt , subject to equations (1) and (2), where the M

0

parameter θ denotes Gypsies’ rate of time preference. The current value Hamiltonian of this problem is: J = log M + γ log H + λ[aC − bM ] + µρ [ M − H ]

where λ is the co-state variable associated with consumption and µ is the co-state variable associated with migration habits. •

•

•

•

The steady state solution of this model 8, C = H = λ = µ = 0 , is the following: •

H = 0⇒M =H

(3)

•

C = 0 ⇒ aC = bM

(4)

•

λ = 0 ⇒ θλ = λa ⇒ λ = λ

(5)

•

µ = 0 ⇒ µ [θ + ρ ] = γ H −1

(6)

J M = 0 ⇒ M −1 − λb + µρ = 0

(7)

Without loss of generality we can assume λ = λ = 1 in equation (5). There remain four equations [(3), (4), (6) and (7)] for four unknowns: M, H, C, and µ. Notice that by introducing equations (3) and (7) into (6) and solving for M, it yields the steady state level of migration (M*): 1 γρ M *= + b b(θ + ρ ) 8

(8)

The first order conditions of this problem are straightforward and can be obtained from the author upon request.

6 The equilibrium level of migration habits, H*, immediately follows from equation (3) and it is the same as the equilibrium value of migrations:

1 γρ H *= + b b(θ + ρ )

(9)

The steady state value of consumption, C*, is found by substituting M* into equation (4): C *=

1 γρ + a a(θ + ρ )

(10)

In order to assess the equilibrium income of the Gypsies, Y*, it is important to stress that an implicit assumption of this model is that Gypsies do not save and, consequently, do not accumulate capital [Gmelch, 1986]. Therefore their actual income is allocated between only two alternatives: actual consumption and actual migration costs, δ (M ) , which are directly proportional to migration: δ ' ( M ) > 0 . Given that the equilibrium values of consumption and migration are determined above, the equilibrium income of Gypsies is: Y * = C * + δ ( M *)

(11)

The equilibrium solutions (11)-(14) show the endogenous variables of the model as functions of the parameters: importance of habits, the relative importance of recent migrations on habit formation, Gypsies’ rate of time preference, and the marginal impacts of actual consumption and migration on consumption variation. The comparative statics analysis of the steady state solutions is presented in Table 2 below: Table 2: The impact of parameters on the endogenous variables a

M*

H*

C*

Y*

0

0

(-)

(-)

b

(-)

(-)

0

(-)

ρ

(+)

(+)

(+)

(+)

γ

(+)

(+)

(+)

(+)

θ

(-)

(-)

(-)

(-)

From Table 2 it follows that all endogenous variables are impacted in the same way by the parameters of the model, with the only exception of parameters a and b. An increase in the Gypsies’ impatience, captured by an increase in their rate of time

7 preference θ, decrease the equilibrium levels of migration, M*, migration habits, H*, consumption, C*, and income, Y*. An increase in the relative importance of recent migration in habit formation, given by ρ, or in the importance of migration habits, given by γ, increases the equilibrium levels of M*, H*, C* and Y*. An increase in the marginal impacts of actual consumption and migration on consumption variation, given respectively by a and b, decrease income. Changes in a do not affect H* and M* and decrease C*. Changes in b do not affect C*, but decrease M* and H*.

3. Concluding Remarks

This paper analyzes permanent migrations, such as the Gypsies’, by the formation of migration habits. The history of the Gypsies, at least in Western Europe, is characterized by constant migration, which makes it difficult to explain it relying solely on economic reasons or forced expulsions. Actually, one of the main characteristics of Gypsies is their continual mobility. The permanent migration behavior becomes a trait of the people, it becomes a habit. By modeling the formation of this habit in a simple dynamic setup this paper describes the determination of migration and migration habits as well as the consumption pattern and income determination of the Gypsies. It is shown that an increase in the importance of migration habits and in the relative importance of recent migration in habit formation increase the steady state equilibrium value of migration, migration habits, consumption and income. While an increase in the Gypsies’ rate of time preference decrease these equilibrium values.

References

Beynon, E.D. (1936) The Gypsy in a non-Gypsy economy, American Journal of Sociology 42, 358-370. Borrow, G. (1841) The Zincali - An Account of the Gypsies of Spain, The Cyber edition (1996) by the Project Gutenberg: http://sailor.gutenberg.org/etext96/zncli10.txt Cabeza de Vaca, A.N. ([1555], 2003) The Narrative of the Cabeza de Vaca, Lincoln: University of Nebraska Press. Carroll, C.D., J. Overland, and D.N. Weil (2000) Saving and growth with habit formation, American Economic Review 90, 341-355.

8 Chiswick, B.R. (1978) The effects of Americanization on the earnings of foreign-born men, Journal of Political Economy 86, 897-921. Duesenberry, J.S. (1967,[1949]) Income, Saving and the Theory of Consumer Behavior, New York: Oxford University Press. Faria, J.R. and M. Leon-Ledesma (2004) Habit formation, working habits and technological progress, Manchester School, forthcoming. Faria, J.R. and A.V. Mollick (1996) Urbanization, economic growth, and welfare, Economics Letters 52, 109-115. Gmelch, S. B. (1986) Groups that don’t want in: Gypsies and other artisan, trader, and entertainer minorities, Annual Review of Anthropology 15, 307-330 Hancock, Ian F. (1987) The Pariah Syndrome: An Account of Gypsy Slavery and Persecution, Ann Arbor: Karoma Press. Hancock, Ian F. (1997) Roma Slavery, in P. Finkelman and J. Miller (eds.) The Encyclopedia of Slavery, New York: Macmillan. Hancock, Ian F. (2002) We Are the Romani People, Hatfield: University of Hertfordshire Press. Lee, Ronald (1998) The Roma: Origins and diaspora, http://www.romani.org/toronto/ diaspora_rl.html Levy, A. and Y. Tsur (2002) Migration timing: Expected returns, risk aversion and assimilation costs, in A. Levy and J.R. Faria (eds.) Economic Growth, Inequality and Migration, Cheltenham: Edward Elgar, 175-189. Prodan, D. (1990) The origins of serfdom in Transylvania, Slavic Review 49, 1-17. Stark, O. and D. Levhari (1982) On migration and risk in LDCs, Economic Development and Cultural Change 31, 191-196. Todaro, M.P. (1969) A model of labor migration and urban unemployment in less developed countries, American Economic Review 59, 138-148. The Patrin Web Journal (1999) http://www.geocities.com/Paris/5121/history.htm

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Appendix:

The first order conditions are: J M = 0 ⇒ M −1 − λb + µρ = 0 •

•

λ − θλ = − J C ⇒ λ − θλ = − [λa ] •

•

µ − θµ = − J H ⇒ µ − θµ = − [γ H −1 − µρ ] plus equations (1) and (2) and the transversality conditions. Comparative statics analysis:

dM * dM * dM * dM * dM * < 0; > 0; > 0; < 0; =0 db dρ dγ dθ da dH * dH * dH * dH * dH * < 0; > 0; > 0; < 0; =0 db dρ dγ dθ da dC * dC * dC * dC * dC * < 0; > 0; > 0; < 0; =0 da dρ dγ dθ db dY * dY * dY * dY * dY * < 0; > 0; > 0; < 0; <0 db dρ dγ dθ da