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Informational Cascades and Decision to Migrate

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  • Epstein, Gil S
Abstract
We introduce the idea that informational cascades can explain the observed regularity that emigrants from the same locations also tend to choose the same foreign locations. Thus informational cascades generates herd behaviour. Herd behaviour is compared with the network externalities explanation of the same phenomenon. The relation between social tensions and herd behaviour is observed when local populations are xenophobic.

Suggested Citation

  • Epstein, Gil S, 2002. "Informational Cascades and Decision to Migrate," CEPR Discussion Papers 3287, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:3287
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    References listed on IDEAS

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    7. Joshua D. Angrist & Adriana D. Kugler, 2001. "Protective or counter-productive? Labor market institutions and the effect of immigration on EU natives," Economics Working Papers 587, Department of Economics and Business, Universitat Pompeu Fabra.
    8. Elise Brezis & Paul Krugman, 1996. "Immigration, investment, and real wages," Journal of Population Economics, Springer;European Society for Population Economics, vol. 9(1), pages 83-93, February.
    9. Giulio Fella & Paola Manzini & Marco Mariotti, 2004. "Does Divorce Law Matter?," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 607-633, June.
    10. Gil S. Epstein & Melanie E. Ward, 2006. "Perceived income, promotion and incentive effects," International Journal of Manpower, Emerald Group Publishing Limited, vol. 27(2), pages 104-125, February.
    11. Scharfstein, David S & Stein, Jeremy C, 1990. "Herd Behavior and Investment," American Economic Review, American Economic Association, vol. 80(3), pages 465-479, June.
    12. Jeffrey Church & Ian King, 1993. "Bilingualism and Network Externalities," Canadian Journal of Economics, Canadian Economics Association, vol. 26(2), pages 337-345, May.
    13. King, Stephen P., 1995. "Search with free-riders," Journal of Economic Behavior & Organization, Elsevier, vol. 26(2), pages 253-271, March.
    14. Joshua D. Angrist & Adriana D. Kugler, 2003. "Protective or counter-productive? labour market institutions and the effect of immigration on eu natives," Economic Journal, Royal Economic Society, vol. 113(488), pages 302-331, June.
    15. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 797-817.
    16. Chiswick, Barry R & Miller, Paul M, 1996. "Ethnic Networks and Language Proficiency among Immigrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 9(1), pages 19-35, February.
    17. Stark,Oded, 1999. "Altruism and Beyond," Cambridge Books, Cambridge University Press, number 9780521663731, September.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Klaus Nowotny, 2009. "Regionale Konzentration von Migranten in der EU 15," WIFO Monatsberichte (monthly reports), WIFO, vol. 82(6), pages 445-457, June.
    2. Klaus Nowotny, 2011. "Welfare Magnets, Taxation and the Location Decisions of Migrants to the EU," WIFO Working Papers 393, WIFO.
    3. Maite Blázquez & Carlos Llano & Julian Moral, 2010. "Commuting Times: Is There Any Penalty for Immigrants?," Urban Studies, Urban Studies Journal Limited, vol. 47(8), pages 1663-1686, July.
    4. Gil S. Epstein & Erez Siniver, 2012. "Can an ethnic group climb up from the bottom of the ladder?," Economics Bulletin, AccessEcon, vol. 32(3), pages 2414-2441.
    5. Warin Thierry & Blakely Andrew, 2012. "Choice or Mimetism in the Decision to Migrate? A European Illustration," Global Economy Journal, De Gruyter, vol. 12(2), pages 1-32, June.
    6. Gil S. Epstein & Ira N. Gang, 2006. "The Influence of Others on Migration Plans," Review of Development Economics, Wiley Blackwell, vol. 10(4), pages 652-665, November.
    7. Piil Damm, Anna, 2005. "Immigrants’ Location Preferences: Exploiting a Natural Experiment," Working Papers 05-2, University of Aarhus, Aarhus School of Business, Department of Economics.
    8. Zhao, Jinhua, 2004. "RURAL LABOR MIGRATION: Migrant Network, Information, and Hysteresis," 2004 Annual meeting, August 1-4, Denver, CO 19990, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Pedersen, Peder J. & Pytlikova, Mariola & Smith, Nina, 2004. "Selection or Network Effects? Migration Flows into 27 OECD Countries, 1990-2000," IZA Discussion Papers 1104, Institute of Labor Economics (IZA).
    10. Gil S. Epstein & Ira N. Gang, 2010. "Why Pay Taxes When No One Else Does?," Review of Development Economics, Wiley Blackwell, vol. 14(2), pages 374-385, May.
    11. Thomas Bauer & Gil Epstein & Ira Gang, 2005. "Enclaves, language, and the location choice of migrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 18(4), pages 649-662, November.
    12. Peter Huber & Klaus Nowotny & Julia Bock-Schappelwein, 2010. "Qualification Structure, Over- and Under-qualification of the Foreign Born in Austria and the EU," WIFO Studies, WIFO, number 41226.
    13. Axel Heitmueller, 2006. "Coordination Failures In Network Migration," Manchester School, University of Manchester, vol. 74(6), pages 701-710, December.
    14. Gil S. Epstein & Renana Lindner Pomerantz, 2013. "Assimilation through Marriage," Review of International Economics, Wiley Blackwell, vol. 21(2), pages 191-203, May.
    15. Mitterbacher, Kerstin & Fleiß, Jürgen & Palan, Stefan, 2024. "Reciprocity in migration policy and labor market integration: A lab experiment," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 1-16.
    16. repec:wsr:ecbook:2010:i:ii-008 is not listed on IDEAS
    17. Gang, Ira & Bauer, Thomas & Epstein, Gil S, 2002. "Herd Effects or Migration Networks? The Location Choice of Mexican Immigrants in the US," CEPR Discussion Papers 3505, C.E.P.R. Discussion Papers.
    18. Ademmer, Esther & Barslund, Mikkel & Benček, David & Di Salvo, Mattia & Groll, Dominik & Hoxhaj, Rezart & Kadkoy, Omar & Lanati, Mauro & Laurentsyeva, Nadzeya & Lücke, Matthias & Ludolph, Lars & Pizzu, 2018. "2018 MEDAM Assessment Report on Asylum and Migration Policies in Europe. Flexible Solidarity: A comprehensive strategy for asylum and immigration in the EU," MEDAM Assessment Report on Asylum and Migration Policies in Europe, Mercator Dialogue on Asylum and Migration (MEDAM), number 182240.
    19. Klaus Nowotny & Dieter Pennerstorfer, 2011. "Ethnic Networks and the Location Choice of Migrants in Europe," WIFO Working Papers 415, WIFO.
    20. A. Daniela Cristina, 2008. "What Sways the Decision to Migrate? An Empirical Analysis of the Argentinean Case," Revista de Economía y Estadística, Universidad Nacional de Córdoba, Facultad de Ciencias Económicas, Instituto de Economía y Finanzas, vol. 46(1), pages 7-30, Junio.

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    More about this item

    Keywords

    Migration; Informational cascades; Herd behaviour; Xenophobia; Network-externalities;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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