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Dynamics in Immigration Community

  • Sergio Vergalli

In this paper, we present a theorethical model that tries to investigate the observable hysteresis process in the migration dynamic. In the model the migration choice depends not only on the wage differential, but also on a U-shaped benefit function of a community of homogenous ethnic individuals, modelled according to the "theory of clubs". The theoretical results, based on real option theory, explain that the observable "jumps" in the migration flows could depend on two variables: the number of coordinated immigrants and the dimension of the community. In fact, the migration choice is procrastinated until a critical mass is reached. Moreover, some possible rigidities in the adjustment of the district dimension, as regards the optimal levels, can magnify the hysteresis process.

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Paper provided by University of Brescia, Department of Economics in its series Working Papers with number ubs0613.

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Date of creation: 2006
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Handle: RePEc:ubs:wpaper:ubs0613
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  1. McDonald, Robert & Siegel, Daniel, 1986. "The Value of Waiting to Invest," The Quarterly Journal of Economics, MIT Press, vol. 101(4), pages 707-27, November.
  2. Valerie R. Bencivenga & Bruce D. Smith, 1995. "Unemployment, migration, and growth," Working Papers 561, Federal Reserve Bank of Minneapolis.
  3. Epstein, Gil S. & Gang, Ira N., 2004. "Ethnic Networks and International Trade," IZA Discussion Papers 1232, Institute for the Study of Labor (IZA).
  4. Michele Moretto, 2003. "Competition and Irreversible Investments under Uncertainty," Working Papers 2003.32, Fondazione Eni Enrico Mattei.
  5. Bartolini, Leonardo, 1993. "Competitive runs : The case of a ceiling on aggregate investment," European Economic Review, Elsevier, vol. 37(5), pages 921-948, June.
  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. Sergio Vergalli & Michele Moretto, 2005. "Migration Dynamics," Working Papers 2005.108, Fondazione Eni Enrico Mattei.
  8. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-42, March.
  9. Heitmueller, Axel, 2003. "Coordination Failures in Network Migration," IZA Discussion Papers 770, Institute for the Study of Labor (IZA).
  10. Leahy, John V, 1993. "Investment in Competitive Equilibrium: The Optimality of Myopic Behavior," The Quarterly Journal of Economics, MIT Press, vol. 108(4), pages 1105-33, November.
  11. Bauer, Thomas K. & Epstein, Gil S. & Gang, Ira N., 2002. "Herd Effects or Migration Networks? The Location Choice of Mexican Immigrants in the U.S," IZA Discussion Papers 551, Institute for the Study of Labor (IZA).
  12. Burda, Michael C, 1995. "Migration and the Option Value of Waiting," CEPR Discussion Papers 1229, C.E.P.R. Discussion Papers.
  13. Edwards, John H. Y., 1992. "Indivisibility and preference for collective provision," Regional Science and Urban Economics, Elsevier, vol. 22(4), pages 559-577, November.
  14. Nicola Daniele Coniglio, 2004. "Migropolis: migration networks and formation of ethnic clusters in cities," ERSA conference papers ersa04p146, European Regional Science Association.
  15. McGuire, Martin, 1974. "Group Segregation and Optimal Jurisdictions," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 112-32, Jan.-Feb..
  16. Buchanan, James M. & Goetz, Charles J., 1972. "Efficiency limits of fiscal mobility: An assessment of the tiebout model," Journal of Public Economics, Elsevier, vol. 1(1), pages 25-43, April.
  17. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
  18. Berglas, Eitan, 1976. "On the Theory of Clubs," American Economic Review, American Economic Association, vol. 66(2), pages 116-21, May.
  19. Locher, Lilo, 2001. "Testing for the Option Value of Migration," IZA Discussion Papers 405, Institute for the Study of Labor (IZA).
  20. Sandler, Todd & Tschirhart, John T, 1980. "The Economic Theory of Clubs: An Evaluative Survey," Journal of Economic Literature, American Economic Association, vol. 18(4), pages 1481-1521, December.
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