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The Role of Community in Migration Dynamics

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  • Sergio Vergalli

    (University of Brescia)

Abstract

In this paper, we present a theoretical model that, implementing the pioneering work of Burda (1995), based on the Real Option Theory, investigates the roots of the migration dynamics. In the model the decision to migrate of each individual depends not only on the wage differential, but also on a U-shaped benefit function of a community of homogeneous ethnic individuals, modelled according to the "theory of clubs". The theoretical results are able to give an explanation to the observable "jumps" in the migration flows and to describe how the trigger for entry can change depending on the dimension of the district. The analysis of the results also sheds light on the dynamics of the districts’ development: some possible rigidities in the adjustment of the district dimension, as regards the optimal levels, could magnify the hysteresis process.

Suggested Citation

  • Sergio Vergalli, 2006. "The Role of Community in Migration Dynamics," Working Papers 2006.4, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2006.4
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    Cited by:

    1. Moretto, Michele & Vergalli, Sergio, 2008. "Managing Migration through Quotas: An Option-theory Perspective," Knowledge, Technology, Human Capital Working Papers 37818, Fondazione Eni Enrico Mattei (FEEM).
    2. M. Moretto & Sergio Vergalli, 2008. "Migration dynamics," Journal of Economics, Springer, vol. 93(3), pages 223-265, April.
    3. Sergio Vergalli, 2011. "Entry and Exit Strategies in Migration Dynamics," Journal of Labor Research, Springer, vol. 32(4), pages 362-389, December.
    4. Michele Moretto & Sergio Vergalli, 2010. "Managing Migration Through Conflicting Policies: An Option‐Theory Perspective," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(3), pages 318-342, July.
    5. 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.
    6. Michele Moretto & Sergio Vergalli, 2010. "Managing Migration Through Conflicting Policies: An Option-Theory Perspective," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(s1), pages 318-342, July.
    7. Baran Siyahhan & Hamed Ghoddusi, 2022. "Optimal investment in human capital under migration uncertainty," Review of International Economics, Wiley Blackwell, vol. 30(2), pages 422-449, May.
    8. Constantin Anghelache & Madalina – Gabriela Anghel & Alina – Georgiana Solomon, 2017. "The Effect of Migration on Labor Resources," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 7(3), pages 6-13, July.
    9. Elsner, Benjamin & Narciso, Gaia & Thijssen, Jacco J. J., 2013. "Migrant Networks and the Spread of Misinformation," IZA Discussion Papers 7863, Institute of Labor Economics (IZA).
    10. José Romero, 2013. "What circumstances lead a government to promote brain drain?," Journal of Economics, Springer, vol. 108(2), pages 173-202, March.
    11. Christian Schmidt, 2011. "Commuting and Migration Decisions under Cost Uncertainty," ERSA conference papers ersa10p1481, European Regional Science Association.
    12. Parello, Carmelo Pierpaolo & Ikhenaode, Bright Isaac, 2021. "Migration, community networks and welfare in neoclassical growth models," Journal of Macroeconomics, Elsevier, vol. 70(C).
    13. Buonanno, Paolo & Pazzona, Matteo, 2014. "Migrating mafias," Regional Science and Urban Economics, Elsevier, vol. 44(C), pages 75-81.

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    More about this item

    Keywords

    Migration; Real option; Theory of clubs; Network effect;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H49 - Public Economics - - Publicly Provided Goods - - - Other
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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