Social Networks and Immigration
Resource: https://www.annualreviews.org/doi/abs/10.1146/annurev-economics-082019-031419
Illegal immigration is a hot button issue in current American politics with both parties having strong views and there being little room for compromise. While lawmakers decide on policy issues and draft legislations, real people are living through and suffering from issues caused by our immigration system. This article explores the inequality in migration and the restrictions put on certain people or countries. Author Kaivan Munshi discusses how when people in third world countries decide to migrate away, they do not choose places in which they would give them greatest gain, but instead choose to go to places where their friends or family have already gone. Social networks seem to connect people even over border fences.
Munshi delves into the idea of social networks affecting migration by picking apart the Roy model, or the traditional characterization of migration in economics. Munshi talks about how the Roy model is outdated as it essentially predicts that migrants will move to wherever results in the highest economic payoff. This idea of payoff is something we have studied at length in our game theory and auction examples. The Roy model would suggest that a migrant choosing a country is similar to a player in a game picking a strategy. Gamers will try to pick the strategy that results in the highest payoff at the end of the game and thus the Roy model predicts migrants will move to wherever provides them with the most economic payoff. Munshi shows how migrants are diverging from this model as many migrants are moving to areas in which the wealth disparity is massive. Migrants make these decisions based on the social networks of connections that they may have in the area that they are migrating to. If they know that their friends and family have been successful migrating to a certain country, they are more likely to join them. Munshi describes many mathematical models that can help predict and analyze the specific social networks that are at play such as employment cohorts and family units. These models overall give the impression that migration is not just a game in which you are looking for the highest payoff, but a complex question in which people consider social and economic security.
Citations:
Munshi, K. (2020). Social Networks and Migration. Annual Review of Economics, 12(1), 503-524. doi:10.1146/annurev-economics-082019-031419