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Ethnic Networks and the Location Choice of Migrants in Europe

  • Klaus Nowotny

    (WIFO)

  • Dieter Pennerstorfer

    (WIFO)

In this paper we analyse the role of ethnic networks in the location decision of migrants to the EU 15 at the regional level. Using a random parameters logit specification we find a substantially positive effect of ethnic networks on the location decision of migrants. The effect is, however, decreasing in network size. Furthermore, we find evidence of spatial spillovers in the effect of ethnic networks: ethnic networks in neighbouring regions significantly help to explain migrants' choice of target regions. The positive effects of ethnic networks thus also extend beyond regional and national borders. Analysing the trade-off between potential income and network size, we find that migrants would require a sizeable compensation for living in a region with a smaller ethnic network, especially when considering regions where only few previous migrants from the same country of origin are located.

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Paper provided by WIFO in its series WIFO Working Papers with number 415.

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Length: 45 pages
Date of creation: 19 Dec 2011
Handle: RePEc:wfo:wpaper:y:2011:i:415
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