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The Role of Community in Migration Dynamics

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  • Sergio Vergalli

Abstract

In this paper, I have presented a theoretical model that investigates the observable hysteresis process in migration dynamics. In the model the migration choice depends not only on wage differential, but also on a U-shaped benefit function of a community of homogenous ethnic individuals, according to the 'theory of clubs'. The results, based on real option theory, explain that observable 'jumps' in migration flows could depend not only on exogenous shocks, but also on two endogenous variables: the number of coordinated immigrants and the dimension of the community. Indeed, migration choice is delayed until a critical mass of immigrants is reached and possible rigidities of optimal district size could magnify this hysteresis process. Copyright 2008 The Author. Journal compilation 2008 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by CEIS in its journal LABOUR.

Volume (Year): 22 (2008)
Issue (Month): 3 (09)
Pages: 547-567

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Handle: RePEc:bla:labour:v:22:y:2008:i:3:p:547-567

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References

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  1. Valerie R. Bencivenga & Bruce D. Smith, 1995. "Unemployment, migration, and growth," Working Papers 561, Federal Reserve Bank of Minneapolis.
  2. Locher, Lilo, 2001. "Testing for the Option Value of Migration," IZA Discussion Papers 405, Institute for the Study of Labor (IZA).
  3. Epstein, Gil S & Gang, Ira, 2004. "Ethnic Networks and International Trade," CEPR Discussion Papers 4616, C.E.P.R. Discussion Papers.
  4. Bauer, Thomas K. & Epstein, Gil S. & Gang, Ira N., 2002. "Herd Effects or Migration Networks? The Location Choice of Mexican Immigrants in the U.S," IZA Discussion Papers 551, Institute for the Study of Labor (IZA).
  5. Buchanan, James M. & Goetz, Charles J., 1972. "Efficiency limits of fiscal mobility: An assessment of the tiebout model," Journal of Public Economics, Elsevier, vol. 1(1), pages 25-43, April.
  6. Leahy, John V, 1993. "Investment in Competitive Equilibrium: The Optimality of Myopic Behavior," The Quarterly Journal of Economics, MIT Press, vol. 108(4), pages 1105-33, November.
  7. Moretto, Michele, 2008. "Competition and irreversible investments under uncertainty," Information Economics and Policy, Elsevier, vol. 20(1), pages 75-88, March.
  8. Kaivan Munshi, 2003. "Networks In The Modern Economy: Mexican Migrants In The U.S. Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 118(2), pages 549-599, May.
  9. Berglas, Eitan, 1976. "On the Theory of Clubs," American Economic Review, American Economic Association, vol. 66(2), pages 116-21, May.
  10. Sandler, Todd & Tschirhart, John T, 1980. "The Economic Theory of Clubs: An Evaluative Survey," Journal of Economic Literature, American Economic Association, vol. 18(4), pages 1481-1521, December.
  11. Burda,M.C., 1995. "Migration and the Option Value of Waiting," Papers 597, Stockholm - International Economic Studies.
  12. repec:wop:humbsf:1995-58 is not listed on IDEAS
  13. Bartolini, Leonardo, 1993. "Competitive runs : The case of a ceiling on aggregate investment," European Economic Review, Elsevier, vol. 37(5), pages 921-948, June.
  14. McGuire, Martin, 1974. "Group Segregation and Optimal Jurisdictions," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 112-32, Jan.-Feb..
  15. Nicola Daniele Coniglio, 2004. "Migropolis: migration networks and formation of ethnic clusters in cities," ERSA conference papers ersa04p146, European Regional Science Association.
  16. Edwards, John H. Y., 1992. "Indivisibility and preference for collective provision," Regional Science and Urban Economics, Elsevier, vol. 22(4), pages 559-577, November.
  17. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
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Citations

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Cited by:
  1. Elsner, Benjamin & Narciso, Gaia & Thijssen, Jacco J. J., 2013. "Migrant Networks and the Spread of Misinformation," IZA Discussion Papers 7863, Institute for the Study of Labor (IZA).
  2. Michele Moretto & Sergio Vergalli, 2007. "Migration Dynamics," "Marco Fanno" Working Papers 0053, Dipartimento di Scienze Economiche "Marco Fanno".
  3. José Romero, 2013. "What circumstances lead a government to promote brain drain?," Journal of Economics, Springer, vol. 108(2), pages 173-202, March.
  4. Michele Moretto & Sergio Vergalli, 2010. "Managing Migration through Conflicting Policies: an Option-theory Perspective," "Marco Fanno" Working Papers 0110, Dipartimento di Scienze Economiche "Marco Fanno".
  5. Buonanno, Paolo & Pazzona, Matteo, 2014. "Migrating mafias," Regional Science and Urban Economics, Elsevier, vol. 44(C), pages 75-81.
  6. Sergio Vergalli, 2011. "Entry and Exit Strategies in Migration Dynamics," Journal of Labor Research, Springer, vol. 32(4), pages 362-389, December.
  7. Michele Moretto & Sergio Vergalli, 2008. "Managing Migration through Quotas: an Option-theory Perspective," Working Papers 2008.51, Fondazione Eni Enrico Mattei.
  8. Zakharenko, Roman, 2012. "Human capital acquisition and international migration in a model of educational market," Regional Science and Urban Economics, Elsevier, vol. 42(5), pages 808-816.
  9. Christian Schmidt, 2011. "Commuting and Migration Decisions under Cost Uncertainty," ERSA conference papers ersa10p1481, European Regional Science Association.

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