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Rational Inattention and Migration Decisions

Author

Listed:
  • Bertoli, Simone

    (CERDI, Université Clermont Auvergne)

  • Fernández-Huertas Moraga, Jesús

    (Universidad Carlos III de Madrid)

  • Guichard, Lucas

    (Institute for Employment Research (IAB), Nuremberg)

Abstract

Acquiring information about destinations can be costly for migrants. We model information frictions in the rational inattention framework and obtain a closed-form expression for a migration gravity equation that we bring to the data. The model predicts that ows from countries with a higher cost of information or stronger priors are less responsive to variations in economic conditions at destination, as migrants rationally get less information before deciding where to move. The econometric analysis reveals systematic heterogeneity in the pro-cyclical behavior of migration flows across origins that is consistent with the existence of information frictions.

Suggested Citation

  • Bertoli, Simone & Fernández-Huertas Moraga, Jesús & Guichard, Lucas, 2020. "Rational Inattention and Migration Decisions," IZA Discussion Papers 13083, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13083
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    2. Isaac Baley & Laura Veldkamp, 2021. "Bayesian learning," Economics Working Papers 1797, Department of Economics and Business, Universitat Pompeu Fabra.
    3. Roc Armenter & Michèle Müller-Itten & Zachary Strangebye, 2021. "Geometric Methods for Finite Rational Inattention," Working Papers 21-30, Federal Reserve Bank of Philadelphia.
    4. Michel Beine & Michel Bierlaire & Frédéric Docquier, 2021. "New York, Abu Dhabi, London or Stay at Home? Using a Cross-Nested Logit Model to Identify Complex Substitution Patterns in Migration," LISER Working Paper Series 2021-01, Luxembourg Institute of Socio-Economic Research (LISER).
    5. Bartosz Maćkowiak & Filip Matějka & Mirko Wiederholt, 2023. "Rational Inattention: A Review," Journal of Economic Literature, American Economic Association, vol. 61(1), pages 226-273, March.
    6. David G. Blanchflower & Alex Bryson, 2021. "The Economics of Walking About and Predicting US Downturns," DoQSS Working Papers 21-31, Quantitative Social Science - UCL Social Research Institute, University College London.
    7. Langella, Monica & Manning, Alan, 2021. "Income and the desire to migrate," LSE Research Online Documents on Economics 113875, London School of Economics and Political Science, LSE Library.
    8. Mitrică, Bianca & Damian, Nicoleta & Grigorescu, Ines & Mocanu, Irena & Dumitraşcu, Monica & Persu, Mihaela, 2022. "Out-migration and social and technological marginalization in Romania. Regional disparities," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    9. Guichard, Lucas & Machado, Joël, 2024. "The Externalities of Immigration Policies on Migration Flows: The Case of an Asylum Policy," IZA Discussion Papers 16935, Institute of Labor Economics (IZA).
    10. Ian Ball & James Bono & Justin Grana & Nicole Immorlica & Brendan Lucier & Aleksandrs Slivkins, 2022. "Content Filtering with Inattentive Information Consumers," Papers 2205.14060, arXiv.org, revised Dec 2023.
    11. Fuchs, Andreas & Gröger, André & Heidland, Tobias & Wellner, Lukas, 2023. "The effect of foreign aid on migration: Global micro evidence from world bank projects," Kiel Working Papers 2257, Kiel Institute for the World Economy (IfW Kiel).
    12. Persyn, Damiaan, 2021. "Migrants looking for opportunities - On destination size and spatial aggregation in the gravity equation for migration," MPRA Paper 111064, University Library of Munich, Germany.

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    More about this item

    Keywords

    rational inattention; information; international migration; gravity equation;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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