Social Networks and Spatial Mobility: Evidence from Facebook in India

Harshil Sahai and Michael Bailey

Papers from arXiv.org

Abstract: This paper studies the role of social networks in spatial mobility across India. Using aggregated and de-identified data from the world's largest online social network, we (i) document new descriptive findings on the structure of social networks and spatial mobility in India; (ii) quantify the effects of social networks on annual migration choice; and (iii) embed these estimates in a spatial equilibrium model to study the wage implications of increasing social connectedness. Across millions of individuals, we find that multiple measures of social capital are concentrated among the rich and educated and among migrants. Across destinations, both mobility patterns and social networks are concentrated toward richer areas. A model of migration suggests individuals are indifferent between a 10% increase in destination wages and a 12-16% increase in destination social networks. Accounting for networks reduces the migration-distance relationship by 19%. In equilibrium, equalizing social networks across locations improves average wages by 3% (24% for the bottom wage-quartile), a larger impact than removing the marginal cost of distance. We find evidence of an economic support mechanism, with destination economic improvements reducing the migration-network elasticity. We also find suggestive evidence for an emotional support mechanism from qualitative surveys among Facebook users. Difference-in-difference estimates suggest college attendance delivers a 20% increase in network size and diversity. Taken together, our data suggest that - by reducing effective moving costs - increasing social connectedness across space may have considerable economic gains.

Date: 2022-03
New Economics Papers: this item is included in nep-geo, nep-mig, nep-net, nep-pay, nep-soc and nep-ure
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