Migration Dynamics

Sergio Vergalli and Michele Moretto

No 2005.108, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper tries to explain why most migration flows show some observable jumps in their processes, a phenomenon that seems to be sympathetic with the characteristic of irreversibility of migration. We present a real option model where the choice to migrate depends on both the differential wage between the host country and the country of origin, and on the probability of being fully integrated into the host country. The theoretical results show that the optimal migration decision of a single individual consists of waiting before migrating in a (coordinate) mass of individuals. The dimension of the migration flow depends on the behavioural characteristics of the ethnic groups: the more "sociable" they are, the larger the size of the wave and the lower the differential wage required. A second part of the paper is devoted to calibrating the model and simulating some migration flows to Italy in the last decade. The calibration is able to replicate the observable migration jumps in the short term. In particular, the calibrated model is able to conjecture the induced labour demand elasticity level of the host country and the behavioural rationale of the migrants.

Keywords: Migration; Real Option; Labour Market; Network Effect (search for similar items in EconPapers)
JEL-codes: F22 O15 R23 (search for similar items in EconPapers)
Date: 2005-09
New Economics Papers: this item is included in nep-dev, nep-geo and nep-net
References: View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Migration dynamics (2008)
Working Paper: Migration Dynamics (2007)
Working Paper: Migration Dynamics (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2005.108

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