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Migration networks as a response to financial constraints: Onset and endogenous dynamics

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  • Stark, Oded
  • Jakubek, Marcin

Abstract

A migration network is modeled as a mutually beneficial cooperative agreement between financially-constrained individuals who seek to finance and expedite their migration. The cooperation agreement creates a network: established migrants contract to support the subsequent migration of others in exchange for receiving support themselves. When the model is expanded to study cooperation between more than two migrants, it emerges that there is a finite optimal size of the migration network. Consequently, would-be migrants in the sending country will form a multitude of networks, rather than a single grand network. When the risk involved in participating in a cooperation agreement is incorporated, the propensity to enter an agreement is shown to depend positively on the cost of migration.

Suggested Citation

  • Stark, Oded & Jakubek, Marcin, 2012. "Migration networks as a response to financial constraints: Onset and endogenous dynamics," University of Tübingen Working Papers in Business and Economics 42, University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics.
    • Handle: RePEc:zbw:tuewef:42
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    References listed on IDEAS

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    1. Stark, Oded & Lucas, Robert E B, 1988. "Migration, Remittances, and the Family," Economic Development and Cultural Change, University of Chicago Press, vol. 36(3), pages 465-481, April.
    2. Besley, Timothy & Coate, Stephen & Loury, Glenn, 1993. "The Economics of Rotating Savings and Credit Associations," American Economic Review, American Economic Association, vol. 83(4), pages 792-810, September.
    3. Stark, Oded & Wang, You Qiang, 2002. "Migration dynamics," Economics Letters, Elsevier, vol. 76(2), pages 159-164, July.
    4. C. Simon Fan & Oded Stark, 2007. "A Social Proximity Explanation of the Reluctance to Assimilate," Kyklos, Wiley Blackwell, vol. 60(1), pages 55-63, February.
    5. Orrenius, Pia M. & Zavodny, Madeline, 2005. "Self-selection among undocumented immigrants from Mexico," Journal of Development Economics, Elsevier, vol. 78(1), pages 215-240, October.
    6. Carrington, William J & Detragiache, Enrica & Vishwanath, Tara, 1996. "Migration with Endogenous Moving Costs," American Economic Review, American Economic Association, vol. 86(4), pages 909-930, September.
    7. M. R. Rosenzweig & Stark, O. (ed.), 1997. "Handbook of Population and Family Economics," Handbook of Population and Family Economics, Elsevier, edition 1, volume 1, number 1.
    8. Kovsted, Jens & Lyk-Jensen, Peter, 1999. "Rotating savings and credit associations: the choice between random and bidding allocation of funds," Journal of Development Economics, Elsevier, vol. 60(1), pages 143-172, October.
    9. Gordon H Hanson & Craig McIntosh, 2010. "The Great Mexican Emigration," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 798-810, November.
    10. Anderson, Siwan & Baland, Jean-Marie & Moene, Karl Ove, 2009. "Enforcement in informal saving groups," Journal of Development Economics, Elsevier, vol. 90(1), pages 14-23, September.
    11. B. Davis & P. Winters, 2001. "Gender, Networks and Mexico-US Migration," Journal of Development Studies, Taylor & Francis Journals, vol. 38(2), pages 1-26.
    12. Oded Stark, 1991. "The Migration of Labor," Blackwell Books, Wiley Blackwell, number 1557860300, June.
    13. Jennifer Lauby & Oded Stark, 1988. "Individual Migration as a Family Strategy: Young Women in the Philippines," Population Studies, Taylor & Francis Journals, vol. 42(3), pages 157-173.
    14. Oded Stark, 2009. "Reasons for Remitting," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 10(3), pages 147-158, July.
    15. Lucas, Robert E B & Stark, Oded, 1985. "Motivations to Remit: Evidence from Botswana," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 901-918, October.
    16. Lori A. Beaman, 2012. "Social Networks and the Dynamics of Labour Market Outcomes: Evidence from Refugees Resettled in the U.S," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(1), pages 128-161.
    17. Sarah Dolfin & Garance Genicot, 2010. "What Do Networks Do? The Role of Networks on Migration and “Coyote” Use," Review of Development Economics, Wiley Blackwell, vol. 14(2), pages 343-359, May.
    18. Kaivan Munshi, 2003. "Networks in the Modern Economy: Mexican Migrants in the U. S. Labor Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(2), pages 549-599.
    19. Stark,Oded, 1999. "Altruism and Beyond," Cambridge Books, Cambridge University Press, number 9780521663731.
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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.
    2. Kępińska, Ewa & Stark, Oded, 2013. "The evolution and sustainability of seasonal migration from Poland to Germany: From the dusk of the 19th century to the dawn of the 21st century," International Review of Economics & Finance, Elsevier, vol. 28(C), pages 3-18.
    3. Oded Stark & Marcin Jakubek, 2022. "Can the evolution of joint savings agreements counter the effect of higher costs of migration on its intensity?," Journal of Evolutionary Economics, Springer, vol. 32(3), pages 757-796, July.

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    More about this item

    Keywords

    Migration network; Schedule of migration; Sequential migration; Affinity; Interpersonal bonds; Cost of migration;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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