Working Paper: CEPR ID: DP13611
Authors: Joshua Blumenstock; Guanghua Chi; Xu Tan
Abstract: What is the value of a social network? Prior work suggests two distinct mechanisms that have historically been difficult to differentiate: as a conduit of information, and as a source of social and economic support. We use a rich 'digital trace' dataset to link the migration decisions of millions of individuals to the topological structure of their social networks. We find that migrants systematically prefer 'interconnected' networks (where friends have common friends) to 'expansive' networks (where friends are well connected). A micro-founded model of network-based social capital helps explain this preference: migrants derive more utility from networks that are structured to facilitate social support than from networks that efficiently transmit information.
Keywords: networks; migration; social networks; social capital; big data; development
JEL Codes: O15; R23; D85; Z13; O12; C55
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| larger networks of contacts (D85) | higher likelihood of migration (R23) |
| larger home networks (D85) | lower likelihood of migration (R23) |
| interconnected networks (D85) | higher likelihood of migration (R23) |
| expansive networks (D85) | lower likelihood of migration (R23) |
| strong ties in destination (Z30) | rivalry in information sharing (L15) |
| prior migration experience (F22) | preference for expansive networks (D85) |