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Dissecting Network Externalities in International Migration

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Author Info

  • Michel BEINE

    ()
    (University of Luxembourg, Luxembourg, and CES-Ifo, Germany)

  • Frédéric DOCQUIER

    ()
    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and FNRS)

  • Caglar ÖZDEN

    ()
    (World Bank, Development Research Group, United States)

Abstract

Existing migrant networks play an important role in explaining the size and structure of immigration flows. They affect the net benefits of migration by reducing assimilation costs (’self-selection channel’) and by lowering legal entry barriers through family reunification programs (’immigration policy channel’). This paper presents an identification strategy allowing to disentangle the relative importance of these two channels. Then, it provides an empirical analysis based on US immigration data by metropolitan area and country of origin. First, we show that the overall network externality is strong: the elasticity of migration flows to network size is around one. Second, only a quarter of this elasticity is accounted for by the policy channel. Third, the policy channel was stronger in the 1990s than in the 1980s as the family reunification programs became more effective with growing diasporas. Fourth, the overall diaspora effect and the policy channel are more important for low-skilled migrants.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 2011022.

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Length: 20
Date of creation: 16 Jun 2011
Date of revision:
Handle: RePEc:ctl:louvir:2011022

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Keywords: Migration; network/diaspora externalities; Immigration policy;

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References

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  1. Bauer, Thomas & Epstein, Gil S & Gang, Ira, 2002. "Herd Effects or Migration Networks? The Location Choice of Mexican Immigrants in the US," CEPR Discussion Papers 3505, C.E.P.R. Discussion Papers.
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Cited by:
  1. Neubecker, Nina & Smolka, Marcel, 2013. "Co-national and cross-national pulls in international migration to Spain," International Review of Economics & Finance, Elsevier, vol. 28(C), pages 51-61.

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