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Immigrant location and network effects: the Helvetic case

  • Nadiya Ukrayinchuk
  • Hubert Jayet

Purpose – The purpose of this paper is try to answer the following question: to which extent the observed location pattern is driven by network effects or by traditional location factors, like the structure and behaviour of the local labour market, housing market, public goods, and local tax rates? Design/methodology/approach – The paper uses an econometric model derived from random utility maximization. This model is estimated on a panel of Helvetic labor market areas, using a two stages estimation method. The first stage allows the network effect to be estimated. In the second stage, it estimates the impact of standard location factors. Findings – The paper finds evidence of a very strong network effect. This network effect is a very important location factor and implies that a location may attract current immigrants mainly because it attracted previous immigrants, even if the traditional location factors are not a source of attractiveness. Research limitations/implications – The present study corroborates earlier work on the Italian case. There is still some work to be done for taking account of the highly localized nature of network externalities. Originality/value – The impact of network on migrants' behavior is a hotly debated issue. However, there is almost no analysis of this impact on migrants' location. Conversely, if the high level of concentration of immigrants is a well known stylized fact, there is almost no study of the factors explaining this concentration. The research starts filling these two gaps.

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Article provided by Emerald Group Publishing in its journal International Journal of Manpower.

Volume (Year): 32 (2011)
Issue (Month): 3 (July)
Pages: 313-333

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Handle: RePEc:eme:ijmpps:v:32:y:2011:i:3:p:313-333
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  1. Bauer, Thomas & Epstein, Gil S & Gang, Ira, 2002. "Herd Effects or Migration Networks? The Location Choice of Mexican Immigrants in the US," CEPR Discussion Papers 3505, C.E.P.R. Discussion Papers.
  2. Light, Ivan & Bhachu, Parminder & Karageorgis, Stavros, 1989. "Migration Networks and Immigrant Entrepreneurship," Institute for Social Science Research, Working Paper Series qt50g990sk, Institute for Social Science Research, UCLA.
  3. Chiswick, Barry R. & Miller, Paul W., 2004. "Where Immigrants Settle in the United States," IZA Discussion Papers 1231, Institute for the Study of Labor (IZA).
  4. Dominique M. Gross & Nicolas Schmitt, 2003. "The Role of Cultural Clustering in Attracting New Immigrants," Journal of Regional Science, Wiley Blackwell, vol. 43(2), pages 295-318.
  5. 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.
  6. Chiswick, Barry R. & Lee, Yew Liang & Miller, Paul W., 2002. "The Determinants of the Geographic Concentration among Immigrants: Application to Australia," IZA Discussion Papers 462, Institute for the Study of Labor (IZA).
  7. Thomas Bauer & Ira Gang & Gil Epstein, 2000. "What Are Migration Networks?," Departmental Working Papers 200016, Rutgers University, Department of Economics.
  8. Hubert JAYET & Nadiya UKRAYINCHUK & Giuseppe DE ARCANGELIS, 2010. "The Location of Immigrants in Italy : Disentangling Networks and Local Effects," Annales d'Economie et de Statistique, ENSAE, issue 97-98, pages 329-350.
  9. Hubert Jayet & Nadiya UKRAYINCHUK, 2007. "La localisation des immigrants en France : Une première approche," Revue d'économie régionale et urbaine, Armand Colin, vol. 0(4), pages 625-649.
  10. Thomas Liebig & Alfonso Sousa-Poza, 2006. "The influence of taxes on migration: evidence from Switzerland," Cambridge Journal of Economics, Oxford University Press, vol. 30(2), pages 235-252, March.
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