Dissecting Network Externalities in International Migration

23 Pages Posted: 7 Feb 2011  

Michel A. R. Beine

University of Luxemburg; CESifo (Center for Economic Studies and Ifo Institute)

Frédéric Docquier

Catholic University of Louvain (UCL); CREAM, Centre for Research on Environmental Appraisal & Management, UK; IZA Institute of Labor Economics

Caglar Ozden

World Bank - Research Department

Date Written: January 31, 2011

Abstract

Existing migrant networks play an important role in explaining the size and structure of immigration flows. They affect the net benefits of migration for future migrants by lowering assimilation costs (‘self-selection’ channel) and increase the probability of potential migrants to obtain a visa through family reunification programs (‘immigration policy’ channel). This paper presents an identification strategy allowing to disentangle these two channels. Then, it provides an empirical illustration 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 nineties than in the eighties due to more generous family reunion program. Fourth, the global elasticity and the policy contribution are much greater for low-skilled migrants.

Keywords: migration, network/diaspora externalities, immigration policy

JEL Classification: F220, O150

Suggested Citation

Beine, Michel A. R. and Docquier, Frédéric and Ozden, Caglar, Dissecting Network Externalities in International Migration (January 31, 2011). CESifo Working Paper Series No. 3333. Available at SSRN: https://ssrn.com/abstract=1756673

Michel A. R. Beine (Contact Author)

University of Luxemburg ( email )

L-1511 Luxembourg
Luxembourg

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Frédéric Docquier

Catholic University of Louvain (UCL) ( email )

Place Montesquieu 3
Louvain-la-Neuve, 1348
Belgium

CREAM, Centre for Research on Environmental Appraisal & Management, UK

University of Newcastle
NE1 7RU Newcastle Upon Tyne
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Çaglar Özden

World Bank - Research Department ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/cozden

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