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Herd Effects or Migration Networks? The Location Choice of Mexican Immigrants in the U.S

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Author Info
Bauer, Thomas (IZA Bonn and CEPR)
Epstein, Gil (Bar Ilan University, CEPR and IZA Bonn)
Gang, Ira N. () (Rutgers University and IZA Bonn)

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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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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 551.

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Length: 43 pages
Date of creation: Aug 2002
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Handle: RePEc:iza:izadps:dp551

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Related research
Keywords: herd effects; networks; immigration; location choice;

Other versions of this item:

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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