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Dissecting Network Externalities in International Migration

Author

Listed:
  • Michel BEINE

    (University of Luxembourg, Luxembourg, and CES-Ifo, Germany)

  • Frédéric DOCQUIER

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and FNRS)

  • 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 reducing 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 immigration 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.

Suggested Citation

  • Michel BEINE & Frédéric DOCQUIER & Caglar ÖZDEN, 2011. "Dissecting Network Externalities in International Migration," LIDAM Discussion Papers IRES 2011022, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvir:2011022
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    References listed on IDEAS

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    More about this item

    Keywords

    Migration; network/diaspora externalities; Immigration policy;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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