Job Migration in a Rivalry Setting
32 Pages Posted: 4 Sep 2019
Date Written: August 20, 2019
The importance of social networks in job search and migration have been well documented. However, spreading information too widely throughout networks when opportunities arise can easily lead to the tragedy of the commons - too many people depleting a limited opportunity can mean no one benefits in the end. Hence, despite the generally positive value of large social networks, we should expect the strategic sharing of information within networks. To better understand this, we study the co-migration decisions of social connections through the movements of gold miners in Colombia. In this setting, we document three facts that are easily interpretable with a model of referrals and scarce resources. First, while working with close social connections is associated with higher production, having too many miners present is ultimately associated with lower production. Second, in line with the first result, we find that more productive miners, for whom depletion of resources is a greater concern, invite fewer social connections. Finally, the connections that miners are willing to invite are heavily selected; miners tend to invite productive over non-productive peers.
Keywords: Social Networks, Migration
JEL Classification: O15, L14
Suggested Citation: Suggested Citation