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IZA Discussion Paper No. 18983
September 2026
Cultural Barriers, Structural Transformation, and Demographic Transition: Evidence from the 1989 Bulgarian--Turkish Refugee Inflow

We ask whether cultural constraints are a development bottleneck in conservative middle-income economies, limiting women's entry into manufacturing and slowing fertility decline and human-capital accumulation. We exploit the 1989 forced migration of ethnic Turks from Bulgaria to Turkiye. Refugee women shared native women's language, religion, and ethnicity but had much higher employment, especially in manufacturing. We combine difference-in-differences with an instrument based on where the state settled earlier ethnic Turkish migrants. Exposure to refugee women raised native women's participation and employment a decade later, especially in male-dominated tradable manufacturing. Native men saw no significant gains. A one-percentage-point higher refugee-to-native ratio raises native women's manufacturing employment by 0.9 percentage points, about 23 percent of the 1990 mean. Exposure reduced fertility and raised middle-school completion among native girls and boys. The results suggest that an exogenous cultural shock relaxed a binding constraint on women's modern-sector entry, a margin central to structural transformation and demographic transition. Intermarriage and World Values Survey evidence is consistent with this view.

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Mark Fallak
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+352 585-855-526
World of Labour
Olga Nottmeyer
olga.nottmeyer-ext@liser.lu
+352 585-855-501
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Christina Gathmann
christina.gathmann@liser.lu

The IZA@LISER Network is a global community of scholars dedicated to excellence in labor economics and related fields, now coordinated at the Luxembourg Institute of Socio-Economic Research (LISER) following its transition from Bonn.

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