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Migration dynamics

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  • Michele Moretto
  • Sergio Vergalli

Abstract

This paper tries to explain why most migration flows show some observable jumps in their processes, a phenomenon that seems to be sympathetic with the characteristic of irreversibility of migration. We present a real option model where the choice to migrate depends on both the differential wage between the host country and the country of origin, and on the probability of being fully integrated into the host country. The theoretical results show that the optimal migration decision of a single individual consists of waiting before migrating in a (coordinate) mass of individuals. The dimension of the migration flow depends on the behavioural characteristics of the ethnic groups: the more "sociable" they are, the larger the size of the wave and the lower the differential wage required. A second part of the paper is devoted to calibrating the model and simulating some migration flows to Italy in the last decade. The calibration is able to replicate the observable migration jumps in the short term. In particular, the calibrated model is able to conjecture the induced labour demand elasticity level of the host country and the behavioural rationale of the migrants.

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Bibliographic Info

Paper provided by University of Brescia, Department of Economics in its series Working Papers with number ubs0507.

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Date of creation: 2005
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Handle: RePEc:ubs:wpaper:ubs0507

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Citations

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Cited by:
  1. Michele Moretto & Sergio Vergalli, 2008. "Managing Migration through Quotas: an Option-theory Perspective," Working Papers 2008.51, Fondazione Eni Enrico Mattei.
  2. Sergio Vergalli & Michele Moretto, 2005. "Migration Dynamics," Working Papers 2005.108, Fondazione Eni Enrico Mattei.
  3. Theodore Palivos & Chong Yip, 2010. "Illegal immigration in a heterogeneous labor market," Journal of Economics, Springer, vol. 101(1), pages 21-47, September.
  4. Christian Schmidt, 2011. "Commuting and Migration Decisions under Cost Uncertainty," ERSA conference papers ersa10p1481, European Regional Science Association.
  5. Sergio Vergalli, 2006. "Dynamics in Immigration Community," Working Papers ubs0613, University of Brescia, Department of Economics.
  6. Sergio Vergalli, 2011. "Entry and Exit Strategies in Migration Dynamics," Journal of Labor Research, Springer, vol. 32(4), pages 362-389, December.
  7. José Romero, 2013. "What circumstances lead a government to promote brain drain?," Journal of Economics, Springer, vol. 108(2), pages 173-202, March.
  8. 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, 07.
  9. Elsner, Benjamin & Narciso, Gaia & Thijssen, Jacco J. J., 2013. "Migrant Networks and the Spread of Misinformation," IZA Discussion Papers 7863, Institute for the Study of Labor (IZA).
  10. Deshingkar, Priya & Akter, Shaheen, 2009. "Migration and Human Development in India," MPRA Paper 19193, University Library of Munich, Germany.

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