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2015 | OriginalPaper | Chapter

Migration and Networks

Author : Douglas R. Nelson

Published in: Complexity and Geographical Economics

Publisher: Springer International Publishing

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Abstract

This paper provides a brief overview of current research on networks in international migration. The paper begins with a short discussion of the relationship between networks and social capital. While controversial, this concept potentially provides a unifying thread linking both various aspects of economic research and, potentially more importantly, providing a bridge linking economic research to parallel research in demography and sociology. The core of the paper is a discussion of the role of networks in the decision to migrate, the role of networks in assimilation, and the effect of global migrant networks on the pattern of international trade. In all three of these areas, recent years have seen substantial new research, both theoretical and empirical, on the ways networks interact with more standard economic variables. In each of these cases, networks are seen to play an essential role in the migration experience.

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Footnotes
1
This is the UN, Department of Economic and Social Affairs, Population Division, estimate of 2010 migration stock from their 2008 Trends in International Migration Stock: The 2008 Revision, Table 1.
 
2
Graph theory is the language of network theory. Unfortunately, there is no really standard language of graph theory. Nonetheless, there are some pretty standard usages. For example, the shortest path between two nodes is usually called the “distance” or “geodesic”. The “eccentricity” is the largest distance for a given node. The “radius” is the smallest eccentricity among all nodes, while the “diameter” is the largest. Chapter 1 of Harris et al. (2008) is an excellent introduction to the basics of graph theory.
 
3
Interestingly, while there are many papers examining international trade flows in this fashion, and global migration has long been analyzed as interacting systems (Kritz et al. 1992), I know of no studies of the network topology of global migration.
 
4
There are a number of problems with social capital as a concept, perhaps more importantly, it is not clear that its creation has the instrumental properties of the other forms of capital (Solow 2000). That is, most of the groups considered in research on social capital (e.g. ethnic communities) are not created for the purpose of generating social capital. Analytically, this makes social capital an endowment, like capital in static economic analysis. On the other hand, social capital is produced and reproduced via the actions of members of the group (even though many of these actions may not be instrumental from the point of view of the members in any obvious way).
 
5
In a broader sense, of course, networks can easily be seen to work on the benefit side as well. Most obviously, people might choose to migrate to a place where there are family or community members because they want to be near those particular people.
 
6
Stark and Jakubek (2013) present a theoretical analysis of the role of migration networks in the financial support of migration and analyze the implications for optimal network size. Interestingly, there is survey based evidence that the more densely embedded in a network of co-ethnics is an agent, the more likely they are to remit earnings (Chort et al. 2012).
 
7
Chau (1997) presents a similar analysis. Teteryatnikova (2013) builds on Calvo-Armengol and Jackson’s (2004) model of job search to provide explicit network microfoundations for models of the Carrington, et al. sort in terms of information provision. Spilimbergo and Ubeda (2004) present an analysis emphasizing family relations, but their causal structure runs through the utility function (a preference to be with “friends and family”) rather than through network effects.
 
8
According to their webpage, the MMP “comprises 143 communities with 22,894 households surveyed in Mexico and 957 households surveyed in the United States. It provides individual level data on 75,066 males and 76,714 females, for a total of 151,785 persons”. More recently this methodology has been extended to a number of Caribbean, Central and South American countries under the Latin American Migration Project (LAMP).
 
9
The gravity model has long been the workhorse empirical framework for empirical work on migration using aggregate data. As with networks, it is quite standard to simply include a variable ad hoc to evaluate its significance in explaining migration flows (e.g. welfare generosity, more or less strict immigration laws, etc.). The same is also true in the case of empirical trade research. The point is not that gravity models themselves are ad hoc, but, rather, that whatever foundations one is using, the empirical performance is so good that one is tempted to include a variety of ad hoc variables that seem potentially important.
 
10
It is also well worth looking at Heckman and Honore’s (1990) analysis of the Roy model in this context.
 
11
Even the question of whether assimilation is, or is not, a “good thing” is contested. Since much of this literature is driven by normative concerns, it is not surprising that even the facts of the matter are highly contested.
 
12
Portes and Sensenbrenner (1993) provide a useful review of the relevant sociological literature. It should be noted, however, that Portes and Sensenbrenner also discuss the negative effects of social embeddedness at length.
 
13
An exception is recent work by Munshi (20032011), who develops models of migration with job search and occupational traps, respectively, in which networks increase the likelihood of positive outcomes. In both cases, the empirical work presented by Munshi is consistent with the implications of the models. A very useful review of the literature on networks, neighborhoods and job search that covers many of the topics, but without a focus on migration is Ioannides and Loury (2004).
 
14
Of course, real markets are characterized by varying mixes of social content (Kirman 2011). It remains the case that, as a wide variety of analysts have suggested, the disembedding of the market is one of the truly distinctive features of capitalism and the extent to which that disembedding fails is a potential source of crisis in the overall capitalist system (e.g. Schumpeter 1942/1975; Polanyi 1994/2001; Habermas 1975).
 
15
This body of research really is “massive”. Starting from Gould’s original paper until the time of writing of this paper, I count over seventy published and unpublished papers. For an extensive review of this literature, see Part I of White (2010), Chapter 2 of White and Tadesse (2011), or the meta-analysis in Genc et al. (2012).
 
16
This makes sense in a partial equilibrium way. However, if the scale of either return migration or emigration of host country natives is correlated with the scale of immigration, this inference may run into trouble.
 
17
As in most of the empirical literature, we use the language of immigrant flows (because that matches the theory used to interpret the results), but it should be understood that the variable in question is invariably a stock.
 
18
References to the large number of papers here can be found in White and Tadesse (2011, Chapter 2) or Gaston and Nelson (2013).
 
19
It should be noted that the econometric implications of own demand and demonstration to host natives are rather different. We would expect own demand to vary more-or-less linearly with immigration, but demonstration effects are likely to be more complex. For example, if there is a uniform propensity of natives to consume new varieties of foreign goods, and information diffuses immediately, the first immigrants provide all the relevant information, leading to an initial jump in demand, but no subsequent change other than the linear increase deriving from own demand. However, if the diffusion of information follows some specific process (or willingness to adopt does) then that process will interact with the linear immigrant process to produce some combination of the two. Most work, either implicitly or explicitly, presumes that there is a positive linear relationship between immigration and demand for imports from host countries running through the preference channel. To the extent that the information bridge runs both ways, immigrants will provide information to their home countries about host country goods, thus increasing exports and, while there is no reason that the process of learning/adoption should be the same in home and host, neither is there any reason to assume the either takes any particular form. From a welfare point of view, both of these channels should increase welfare in the context of a Krugman (1981) monopolistic competition model of the sort that underlies the Anderson-van Wincoop (2003) framework central to much of the gravity modeling used to study the empirical relationship between trade and migration. Romer (1994) makes a similar argument in his discussion of the welfare cost of trade restrictions where imports may be new goods.
 
20
Felbermayr et al. (2010) replicate and extend the Rauch/Trindade analysis by using more current econometric techniques and by considering additional diasporas. While they estimate much smaller effects across all types of markets, they still find that the Chinese diaspora is more important for differentiated goods than for either of the standardized goods. Interestingly, they also find that, in terms of trade creation, the Moroccan, Polish, Turkish, Pakistani, Philippino, Mexican and British are all at least as important as the Chinese.
 
21
More recently, a couple of studies have used a categorization based on the Broda and Weinstein (Broda and Weinstein 2006) elasticities of substitution (Tai 2009; Bettin and Turco 2010; Peri and Requena-Silvente 2010). The effects here are, if anything, weaker.
 
22
Interestingly, for the Danish case, White (2007) finds that the immigrant trade links are strongest for high income trading partners, rather than low income partners.
 
23
An interesting specific case that has been well studied involves the role of ultra-orthodox Jews in the organization of the wholesale diamond industry (Bernstein 1992; Richman 20052009).
 
24
This is a standard of immigrant narratives, but there is a sizable body of systematic research on these links as well. One of the most compelling remains Massey et al.’s classic Return to Aztlan (Massey et al. 1987). In addition to a steady flow of work from the Mexican Migration Project at Princeton, directed by Massey, there is a sizable body of work across many disciplines in the social sciences (e.g. Taylor 1986; Winters et al. 2001; McKenzie and Rapoport 2007).
 
25
A number of the papers on trade and migration have considered different levels of skill, but the emphasis there is on whether some level of skill is particularly strongly associated with trade creation (Hong and Santhapparaj 2006; Dolman 2008; Felbermayr and Jung 2009; Hatzigeorgiou 2010; Javorcik et al. 2011; Felbermayr and Toubal 2012). This work tends to find that skilled immigrants are strongly associated with trade creation, though intermediate levels of skill seem to have no such relationship. Closest to our work is that of Felbermayr and Toubal, which finds that share of high skilled migrants is strongly associated with exports of differentiated goods and goods traded on organized markets, but less so with goods associated with reference prices.
 
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Metadata
Title
Migration and Networks
Author
Douglas R. Nelson
Copyright Year
2015
DOI
https://doi.org/10.1007/978-3-319-12805-4_7