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Herd Effects or Migration Networks? The Location Choice of Mexican Immigrants in the US

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Author Info
Bauer, Thomas
Epstein, Gil S
Gang, Ira

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Abstract

This Paper addresses the question: why and where do immigrants cluster? We examine the relative importance and interaction of two alternative explanations of immigrant clustering: (1) network externalities and (2) herd behavior. We advance the theory by presenting a framework encompassing both network and herd effects, and by delineating various types of network and herd effects in our empirical work. In order to distinguish between herd and network externalities, we use the Mexican Migration Project data. Our empirical results show that both network externalities and herds have significant effects on the migrant’s decision of where to migrate. Moreover, the significance and size of the effects vary according to the legal status of the migrant and whether the migrant is a ‘new’ or a ‘repeat’ migrant. The network-externality effect has an inverse U shape, not simply a linear positive effect as often presented in the literature. Neglecting herds and/or networks, or the inverse U shape of network effects leads to faulty conclusions about migrant behavior.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3505.

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Date of creation: Aug 2002
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Handle: RePEc:cpr:ceprdp:3505

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Related research
Keywords: herd effects immigration location choice networks

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Find related papers by JEL classification:
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Gang, Ira N. & Bauer, Thomas K., 1998. "Temporary Migrants From Egypt: How Long Do They Stay Abroad?," IZA Discussion Papers 03, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. Epstein, Gil S, 2002. "Informational Cascades and Decision to Migrate," CEPR Discussion Papers 3287, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  3. McFadden, Daniel, 1974. "The measurement of urban travel demand," Journal of Public Economics, Elsevier, vol. 3(4), pages 303-328, November. [Downloadable!] (restricted)
  4. Bartel, Ann P, 1989. "Where Do the New U.S. Immigrants Live?," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 371-91, October. [Downloadable!] (restricted)
  5. Bauer, Thomas K. & Lofstrom, Magnus & Zimmermann, Klaus F., 2000. "Immigration Policy, Assimilation of Immigrants and Natives' Sentiments towards Immigrants: Evidence from 12 OECD-Countries," IZA Discussion Papers 187, Institute for the Study of Labor (IZA). [Downloadable!]
  6. Gang, Ira N. & Rivera-Batiz, Francisco L. & Yun, Myeong-Su, 2002. "Economic Strain, Ethnic Concentration and Attitudes Towards Foreigners in the European Union," IZA Discussion Papers 578, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  7. Gang, Ira N & Rivera-Batiz, Francisco L, 1994. "Labor Market Effects of Immigration in the United States and Europe: Substitution vs. Complementarity," Journal of Population Economics, Springer, vol. 7(2), pages 157-75.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Docquier, Frederic & Rapoport, Hillel, 2004. "Skilled migration: the perspective of developing countries," Policy Research Working Paper Series 3382, The World Bank. [Downloadable!]
    Other versions:
  2. Damm, Anna Piil & Rosholm, Michael, 2003. "Employment Effects of Dispersal Policies on Refugee Immigrants, Part II: Empirical Evidence," IZA Discussion Papers 925, Institute for the Study of Labor (IZA). [Downloadable!]
  3. Piil Damm, Anna, 2005. "The Danish Dispersal Policy on Refugee Immigrants 1986-1998: A Natural Experiment?," Working Papers 05-3, University of Aarhus, Aarhus School of Business, Department of Economics. [Downloadable!]
  4. Maurice Kugler, . "Migrant Remittances, Human Capital Formation and Job Creation Externalities in Colombia," Borradores de Economia 370, Banco de la Republica de Colombia. [Downloadable!]
    Other versions:
  5. Piil Damm, Anna, 2005. "Immigrants’ Location Preferences: Exploiting a Natural Experiment," Working Papers 05-2, University of Aarhus, Aarhus School of Business, Department of Economics. [Downloadable!]
  6. Sergio Vergalli, 2006. "Dynamics in Immigration Community," Working Papers ubs0613, University of Brescia, Department of Economics. [Downloadable!]
  7. Michele Moretto & Sergio Vergalli, 2005. "Migration dynamics," Working Papers ubs0507, University of Brescia, Department of Economics. [Downloadable!]
    Other versions:
  8. Pedersen, Peder J. & Pytlikova, Mariola & Smith, Nina, 2004. "Selection or Network Effects? Migration Flows into 27 OECD Countries, 1990-2000," IZA Discussion Papers 1104, Institute for the Study of Labor (IZA). [Downloadable!]
  9. McKenzie, David & Rapoport, Hillel, 2007. "Self-selection patterns in Mexico-U.S. migration : the role of migration networks," Policy Research Working Paper Series 4118, The World Bank. [Downloadable!]
    Other versions:
  10. David A. Jaeger, 2006. "Green Cards and the Location Choices of Immigrants in the United States, 1971-2000," Working Papers 29, Department of Economics, College of William and Mary. [Downloadable!]
    Other versions:
  11. Natálie Reichlová, 2005. "Can the Theory of Motivation Explain Migration Decisions?," Working Papers IES 97, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised 2005. [Downloadable!]
  12. Axel Heitmueller, 2003. "Co-ordination Failures in Network Migration," CERT Discussion Papers 0302, Centre for Economic Reform and Transformation, Heriot Watt University. [Downloadable!]
    Other versions:
  13. Hendrik P. van Dalen & George Groenewold & Tineke Fokkema, 2005. "Remittances and their Effect on Emigration Intentions in Egypt, Morocco and Turkey," Tinbergen Institute Discussion Papers 05-030/1, Tinbergen Institute. [Downloadable!]
  14. Sergio Vergalli, 2006. "The Role of Community in Migration Dynamics," Working Papers 2006.4, Fondazione Eni Enrico Mattei. [Downloadable!]
  15. Anna Piil Damm, 2005. "Determinants of Recent Immigrants’ Location Choices: Quasi-Experimental Evidence," CAM Working Papers 2005-17, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics. [Downloadable!]
  16. Robert Elliott & Joanne Kathryn Lindley, 2006. "Immigrant Wage Differentials, Ethnicity and Occupational Clustering," Working Papers 2006008, The University of Sheffield, Department of Economics, revised May 2006. [Downloadable!]
  17. Piil Damm, Anna & Rosholm, Michael, 2005. "Employment Effects of Dispersal Policies on Refugee Immigrants: Empirical Evidence," Working Papers 04-20, University of Aarhus, Aarhus School of Business, Department of Economics. [Downloadable!]
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This page was last updated on 2008-7-25.

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