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Migration and the Value of Social Networks

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  • Blumenstock, Joshua
  • Chi, Guanghua
  • Tan, Xu

Abstract

What is the value of a social network? Prior work suggests two distinct mechanisms that have historically been difficult to differentiate: as a conduit of information, and as a source of social and economic support. We use a rich 'digital trace' dataset to link the migration decisions of millions of individuals to the topological structure of their social networks. We find that migrants systematically prefer 'interconnected' networks (where friends have common friends) to 'expansive' networks (where friends are well connected). A micro-founded model of network-based social capital helps explain this preference: migrants derive more utility from networks that are structured to facilitate social support than from networks that efficiently transmit information.

Suggested Citation

  • Blumenstock, Joshua & Chi, Guanghua & Tan, Xu, 2019. "Migration and the Value of Social Networks," CEPR Discussion Papers 13611, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:13611
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    References listed on IDEAS

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    Cited by:

    1. Anandi Mani & Emma Riley, 2019. "Social networks, role models, peer effects, and aspirations," WIDER Working Paper Series wp-2019-120, World Institute for Development Economic Research (UNU-WIDER).
    2. Simone Bertoli & Ilse Ruyssen, 2018. "Networks and migrants’ intended destination," Journal of Economic Geography, Oxford University Press, vol. 18(4), pages 705-728.
    3. Buechel, Konstantin & Puga, Diego & Viladecans-Marsal, Elisabet & von Ehrlich, Maximilian, 2019. "Calling from the outside: The role of networks in residential mobility," CEPR Discussion Papers 13615, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    Big Data; Development; migration; networks; social capital; Social Networks;

    JEL classification:

    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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