Networks and migrants’ intended destination∗ Simone Bertolia and Ilse Ruyssenb aUniversity of Auvergne† and CNRS bSHERPPA, Ghent University and IRES, Universit´eCatholique de Louvain‡ March 7, 2016 Abstract Social networks are known to influence migration decisions, but it is hard to observe connections across individuals in the data. We rely on individual-level surveys con- ducted by Gallup in 148 countries that provide information on migration aspirations and on the existence of distance-one connections for all respondents in each of the poten- tial countries of (intended) destination. The origin-specific distribution of distance-one connections across destinations from Gallup closely mirrors the actual distribution of migrant stocks. This unique data source allows estimating origin-specific RUM-based location decision models that shed light on the value of having a friend in a given coun- try on the attractiveness of (intended) migration to that destination. We also test the validity of the distributional assumptions that underpin the estimation. The results of the econometric analysis also provide suggestive evidence that a direct connection to social networks at destination is less valuable for origin countries with a diaspora that is concentrated in few destinations. ∗The authors are grateful to Fr´ed´eric Docquier, Jes´us Fern´andez-Huertas Moraga and Jo¨el Machado and to participants at seminar presentations at CERDI and at the University of Ghent for their comments, to Robert Manchin and the Gallup Institute for Advanced Behavioural Studies for providing access to the data for the purpose of this project, to Olivier Santoni for providing excellent research assistance. Simone Bertoli acknowledges the support received from the Agence Nationale de la Recherche of the French government through the program “Investissements d’avenir” (ANR-10-LABX-14-01) the usual disclaimers apply. †CERDI, Bd. F. Mitterrand, 65, F-63000, Clermont-Ferrand - France; email: [email protected]. ‡Department of Economics, Tweekerkenstraat 2, 9030 Ghent - Belgium; email: [email protected]. 1 1 Introduction Social networks are expected to exert an important influence on migration decisions, as connections with individuals that have already moved contribute to improve job prospects at destination of a potential migrant (Munshi, 2003), and they can reduce the multifaceted costs of crossing a border. The existing empirical evidence is based on rather coarse measures of networks, such as the share of households with a migrant at the village (McKenzie and Rapoport, 2010) or at the county level (Bertoli, 2010), or the size of the diaspora in each des- tination country (see, for instance, Pedersen, Pytlikova, and Smith, 2008; Beine, Docquier, and Ozden,¨ 2011, 2015; Beine and Salomone, 2013; Bertoli and Fern´andez-Huertas Moraga, 2015). The implicit assumption behind this approach, which reflects binding data con- straints, is that all potential migrants have an equal access to the networks at destination.1 This assumption is at odds with theoretical representations of social networks (see Jackson, 2010) and with how members of a migrant network interact with each other (Comola and Mendola, 2015). Our objective is to contribute to gaining a deeper understanding of how social networks influence international migration by using a dataset that provides unique information on the individual-level connections to networks in each potential destination. Specifically, we draw on the data from the Gallup World Polls (see Gallup, 2013) conducted in 148 countries of the world between 2007 and 2013. For each respondent, we have information on whether she has household members, relatives or friends who reside abroad, with information on the (up to four) countries in which they reside.2 Reassuringly, the geographical distribution of distance-one connections for each country matches closely the actual bilateral distribution of migrant across destinations for 2010 from the World Bank (2015a). We combine the information on the countries in which a respondent has a distance-one 1The estimation of gravity equations derived from underlying random utility maximization models on aggregate data has to rest on this assumption, as the equivalence of the estimates obtained on aggregate or on individual-level data depends on the absence of individual-specific regressors (Guimaraes, Figueiredo, and Woodward, 2003). Munshi (2015) reviews additional concerns related to the identification of network effects from gravity equation on aggregate data on bilateral migration flows. 2This destination-specific dimension of the information is what distinguishes the data that we use from the dataset on internal Chinese migration used by Giulietti, Wahba, and Zenou (2014), who have information about whether each individual has a friend residing in an (unspecified) Chinese urban area. 2 connection with information on whether she aspires to emigrate to another country,3 and if so to which destination. The Gallup World Polls do not provide information about actual moves, but we provide econometric evidence that the bilateral number of aspiring migrants by year is significantly associated with the yearly scale of actual bilateral migration flows to OECD destinations.4 There is a large literature in sociology and demography focusing on the determinants of intentions to emigrate (as in Becerra, 2012; Carling, 2002; Creighton, 2013; Van Dalen, Groenewold, and Fokkema, 2005; van Dalen, Groenewold, and Schoorl, 2005; Drinkwater and Ingram, 2009; J´onsson, 2008; Papapanagos and Sanfey, 2001; Wood, C.L., Ribeiro, and Hamsho-Diaz, 2010; Yang, 2000). Most of these papers use country-specific surveys, making it difficult to dig out comparative conclusions. On the contrary, the Gallup database covers a large number of countries of all sizes, regions and income levels, which makes it exceptional. Only a few studies have relied on Gallup World Polls to investigate the patterns and de- terminants of migration aspirations, disregarding the bilateral dimension. Esipova, Ray, and Pugliese (2011) present detailed descriptive statistics on the willingness to migrate across countries; Manchin, Manchin, and Orazbayev (2014) analyzes the effect of individual sat- isfaction on the desire to emigrate; Dustmann and Okatenko (2014) identify the effects of wealth constraints and local amenities. Other studies explore the bilateral dimension of the database after aggregating individual data, i.e. after computing the aggregate proportion of individuals who express a desire to leave their country and their bilateral shares. Docquier, Machado, and Sekkat (2015) and Delogu, Docquier, and Machado (2015) use the Gallup World Polls to quantify the short-run and long-run effects of removing migration barriers internationally, assuming that all aspiring migrants would be able to move after a complete liberalization. More related to our work, Docquier, Peri, and Ruyssen (2014) empirically analyze the country-specific and bilateral factors governing the size and skill composition of the pool of aspiring migrants, as well as the probability to realize aspirations. They find that the average income at destination and the presence of networks of previous migrants are ro- 3The Gallup World Polls include the following question: “Ideally, if you had the opportunity, would you like to move to another country, or would you prefer to continue living in this country?”; the answers to this question have been interpreted by Docquier, Machado, and Sekkat (2015) as reflecting whether an individual would move in a world with no policy-induced restrictions on human mobility. 4See also Chort (2014) for empirical evidence on the relationship between stated intentions to move and actual migration. 3 bust and quantitatively significant determinants of potential migration rates. However, they rely on macrodata to construct their network variable and ignore individual heterogeneity in network connections. To the best of our knowledge, our paper is the first to examine the effect of individual network on intended destination choices. We estimate - separately for each country - a conditional logit model that describes the choice of aspiring migrants among the alternative (intended) destinations.5 The estimation reveals that having a distance-one connection in a country is associated with a substantially higher conditional probability of choosing that country. Specifically, having a friend or a relative in a potential destination increases by a factor of eight the log odds of opting for that destination. The estimated coefficients of the variable of interest are compared with those that we obtain when re-estimating the model over restricted choice sets, as the distributional assumptions that underpin the conditional logit model imply that the coefficients should remain stable when the choice set is modified. The estimated coefficients for distance-one connections, which prove to be stable to vari- ations in the size of the choice set, are significantly negatively correlated with measures of concentration of the diaspora of a country. Specifically, the estimated coefficient is substan- tially lower for countries such as Mexico, whose diasporas are highly concentrated in one or in a few destinations compared to countries such as France, that have a more even distribution of their migrants across destinations. This indirectly suggests that the influence exerted by a distance-one connection on the attractiveness of a potential destination is a hump-shaped function of the size of the diaspora