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Dissecting Network Externalities in International Migration

Author Info

  • 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.

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Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 2011022.

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Length: 20
Date of creation: 16 Jun 2011
Date of revision:
Handle: RePEc:ctl:louvir:2011022
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Keywords: Migration; network/diaspora externalities; Immigration policy;

Other versions of this item:

Find related papers by 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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  4. David McKenzie & Hillel Rapoport, 2010. "Self-Selection Patterns in Mexico-U.S. Migration: The Role of Migration Networks," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 811-821, November.
  5. Michel BEINE & Frederic DOCQUIER & Caglar OZDEN, 2009. "Diasporas," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2009002, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  6. Kaivan Munshi, 2003. "Networks In The Modern Economy: Mexican Migrants In The U.S. Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 118(2), pages 549-599, May.
  7. Gang, Ira N & Rivera-Batiz, Francisco L, 1994. "Labor Market Effects of Immigration in the United States and Europe: Substitution vs. Complementarity," Journal of Population Economics, Springer, vol. 7(2), pages 157-75.
  8. Joao Santos Silva & Silvana Tenreyro, 2009. "On the existence of the maximum likelihood estimates for Poisson regression," LSE Research Online Documents on Economics 25504, London School of Economics and Political Science, LSE Library.
  9. Ira N. Gang & Thomas Bauer & Gil S. Epstein, 2002. "Herd Effects or Migration Networks? The Location Choice of Mexican Immigrants in the U.S," Departmental Working Papers 200216, Rutgers University, Department of Economics.
  10. Guillermina Jasso & Mark Rosenzweig, 1986. "Family reunification and the immigration multiplier: U.S. immigration law, origin-country conditions, and the reproduction of immigrants," Demography, Springer, vol. 23(3), pages 291-311, August.
  11. David Card, 2009. "Immigration and Inequality," NBER Working Papers 14683, National Bureau of Economic Research, Inc.
  12. Serge Coulombe & Jean-Francois Tremblay, 2009. "Migration and Skills Disparities across the Canadian Provinces," Regional Studies, Taylor & Francis Journals, vol. 43(1), pages 5-18.
  13. Frédéric Docquier & B. Lindsay Lowell & Abdeslam Marfouk, 2009. "A Gendered Assessment of Highly Skilled Emigration," Population and Development Review, The Population Council, Inc., vol. 35(2), pages 297-321.
  14. Tenreyro, Silvana, 2007. "On the trade impact of nominal exchange rate volatility," Journal of Development Economics, Elsevier, vol. 82(2), pages 485-508, March.
  15. Mattoo, Aaditya & Neagu, Ileana Cristina & Ozden, Caglar, 2005. "Brain waste? Educated immigrants in the U.S. labor market," Policy Research Working Paper Series 3581, The World Bank.
  16. Winters, Paul C. & de Janvry, Alain & Sadoulet, Elisabeth, 1999. "Family And Community Networks In Mexico-U.S. Migration," Working Papers 12907, University of New England, School of Economics.
  17. Jeffrey Grogger & Gordon H. Hanson, 2008. "Income Maximization and the Selection and Sorting of International Migrants," NBER Working Papers 13821, National Bureau of Economic Research, Inc.
  18. McFadden, Daniel L., 1984. "Econometric analysis of qualitative response models," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 24, pages 1395-1457 Elsevier.
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Cited by:

  1. Driouchi, Ahmed, 2014. "Evidence and Prospects of Shortage and Mobility of Medical Doctors: A Literature Survey," MPRA Paper 59322, University Library of Munich, Germany.
  2. 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.

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