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Dissecting Network Externalities in International Migration

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  • Michel Beine

    ()
    (CREA, University of Luxembourg, IRES, CREAM and CES-Ifo)

  • Frédéric Docquier

    (and IRES, Universite Catholique de Louvain, Belgium)

  • 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 reduc- ing 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 immi- gration 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 Center for Research in Economic Analysis, University of Luxembourg in its series CREA Discussion Paper Series with number 11-09.

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Date of creation: 2011
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Handle: RePEc:luc:wpaper:11-09

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

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  1. Guillermina Jasso & Mark Rosenzweig, 1986. "Family reunification and the immigration multiplier: U.S. immigration law, origin-country conditions, and the reproduction of immigrants," Demography, Springer, Springer, vol. 23(3), pages 291-311, August.
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  7. Michel Beine & Frédéric Docquier & Çaglar Özden, 2009. "Diasporas," CREA Discussion Paper Series, Center for Research in Economic Analysis, University of Luxembourg 09-15, Center for Research in Economic Analysis, University of Luxembourg.
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  13. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, Elsevier, vol. 95(1), pages 42-57, May.
  14. Serge Coulombe & Jean-Francois Tremblay, 2009. "Migration and Skills Disparities across the Canadian Provinces," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 43(1), pages 5-18.
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  17. David Card, 2009. "Immigration and Inequality," American Economic Review, American Economic Association, American Economic Association, vol. 99(2), pages 1-21, May.
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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, Elsevier, vol. 28(C), pages 51-61.

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