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Herd Effects and Migration

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Author Info

  • Epstein, Gil S
  • Hillman, Arye L.

Abstract

In this paper we introduce the notion of herd effects or information cascades into models of migration-related phenomena. We consider individuals making sequential decisions regarding emigration. Each individual receives a signal which conveys private information regarding preferred locations abroad, and also observes the decisions made by previous emigrants. The herd behaviour which ensues gives rise to geographical concentration in host countries of immigrants from the one location. We show how herd effects can be expected to have both efficiency and political-economy consequences. We expect international factor allocation predicated on herd effects to be inefficient. Herd effects can also be the source of social tensions when the host country’s resident population is xenophobic. In general, herd effects can lead to incorrect personal location decisions, since people are led to discount their private information. We also compare herd effects with the network-externalities explanation of immigrant concentration.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1811.

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Date of creation: Mar 1998
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Handle: RePEc:cpr:ceprdp:1811

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Related research

Keywords: clustering; Herd Behaviour; Migration; Network Externalities;

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Cited by:
  1. Herbert Brücker & Philipp J.H. Schroeder, 2011. "International Migration with Heterogeneous Agents: Theory and Evidence for Germany, 1967-2009," Norface Discussion Paper Series 2011027, Norface Research Programme on Migration, Department of Economics, University College London.
  2. Docquier, Frédéric & Rapoport, Hillel, 2007. "Skilled Migration: The Perspective of Developing Countries," IZA Discussion Papers 2873, Institute for the Study of Labor (IZA).
  3. Schiff, Maurice, 2002. "Love thy neighbor: trade, migration, and social capital," European Journal of Political Economy, Elsevier, vol. 18(1), pages 87-107, March.

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