Migration and the Value of Social Networks

How does the structure of an individual’s social network affect his or her decision to migrate?

Economic theory suggests two prominent mechanisms — as conduits of information about jobs, and as a safety net of social support— that have historically been difficult to differentiate. We bring a rich new dataset to bear on this question, which allows us to adjudicate between these two mechanisms and add considerable nuance to the debate. Using the universe of mobile phone records of an entire country over a period of four years, we first characterize the migration decisions of millions of individuals with extremely granular quantitative detail. We then use the data to reconstruct the complete social network of each person in the months before and after migration, and show how migration decisions relate to the size and structure of the migrant’s social network. We use these stylized results to develop and estimate a structural model of network utility, and find that the average migrant benefits more from networks that provide social support than networks that efficiently transmit information. Finally, we show that this average effect masks considerable heterogeneity in how different types of migrants derive value from their social networks.