Formation of Migrant Networks

• Date: 01 April 2015
• DOI: http://doi.org/10.1111/sjoe.12093
• Published date: 01 April 2015
• Author: Mariapia Mendola,Margherita Comola

Scand. J. of Economics 117(2), 592–618, 2015

DOI: 10.1111/sjoe.12093

Formation of Migrant Networks∗

Margherita Comola

Paris School of Economics, FR-75647 Paris Cedex 13, France

margherita.comola@psemail.eu

Mariapia Mendola

University of Milano Bicocca, 20126 Milan, Italy

mariapia.mendola@unimib.it

Abstract

In this paper, we provide the first direct evidence on the internal structure of the migrant

social network. By using a purposely designed survey on Sri Lankan immigrants living

in Milan, we show that the pattern of within-group link formation is heterogeneous across

immigrants, and differentiated according to the network function (i.e., accommodation, credit,

job-finding). We find that migrants tend to interact with co-nationals who come from nearby

localities at origin, while the time of arrival has a U-shaped effect. Once the link is formed,

material support is provided mainly to relatives, while early migrant fellows are helpful for

job-finding.

Keywords: Migration; Milan; social links; Sri Lanka

JEL classification:C45; D85; J15

I. Introduction

Interpersonal relationships have long been shown to be a key element in

the functioning of imperfect markets and the economy as a whole (among

others, see Granovetter, 1985, 1995; Montgomery, 1991; Jackson, 2005;

Goyal, 2007). At the same time, a growing body of research in economics

and other social sciences has documented that network formation is an en-

dogenous process with potentially uneven consequences on the distribution

of individual outcomes (Jackson and Rogers, 2007).

The purpose of this paper is to investigate the factors determining the

formation of interpersonal links among immigrants in the host society, and

their economic function. It is well recognized that social ties are particu-

larly important to the migrant population, because newcomers often lack

∗We are deeply indebted to Raffaele Vacca for the excellent work of data collection. We

have benefited from useful comments from participants to the 6th Conference on Migration

and Development. Financial support from CISEPS-Bicocca, Centro Studi Luca d’Agliano

(LdA), and the French National Research Agency (ANR-10-LABX93-01) is gratefully

acknowledged.

CThe editors of The Scandinavian Journal of Economics 2014.

M. Comola and M. Mendola 593

skills or knowledge specific to the receiving country (e.g., Massey et al.,

1999; Munshi, 2003). However, because investigators typically do not ob-

serve the internal structure of the immigrant network, much of the previous

empirical literature has relied on very indirect measures of migrant social

ties, by assuming that migrants interact homogeneously in groups. This

paper fills this gap and provides what is, to the best of our knowledge,

the first systematic evidence on the internal structure of immigrant social

networks by analyzing the formation of links among them at destination.

We use unique data purposely collected by the authors on an ethnically

homogeneous sample of male migrants originally from Sri Lanka and liv-

ing in Milan. In particular, we have collected detailed information on all

personal links and episodes of material support among sampled individuals,

along with socioeconomic background data, time of immigration, and city

of origin in the native country.

Our point of departure is the idea that, within a group, individuals are

likely to have different patterns of interactions, which in turn might affect

their outcomes (Goyal, 2007). The empirical evidence on the creation of

links in different contexts has shown that social ties are largely shaped by

partners’ similarity and geographic proximity (e.g., Fafchamps and Lund,

2003; Fafchamps and Gubert, 2007). However, in recent works, it has been

argued that partners’ heterogeneity, reflected in differences in wealth and

race for instance, plays an important role in network formation (e.g., Mayer

and Puller, 2008; Krishnan and Sciubba, 2009). We further explore these

arguments for the community of immigrants, a subset of the population

where personal networks are particularly relevant for economic outcomes

and integration (e.g., Munshi, 2003; Mckenzie and Rapoport, 2010). Yet,

while the existing evidence has focused on aggregate proxies (such as the

size of the migrant community at origin or destination) in order to study

the effects of the social network of migrants, much less is known about

the internal structure of such a network and the patterns of link formation

among immigrants in the host country. It is legitimate to assume that the

endogenous creation of links among newcomers in a foreign social context

is substantially different from other link formation processes documented in

the literature, which mainly refer to geographically stable communities (e.g.,

risk-sharing in villages, teenager friendships, homeless people). In partic-

ular, it is not clear to what extent the pattern of within-group interactions

is heterogeneous (e.g., in the time-of-arrival dimension) across immigrants,

and whether it is differentiated according to the network function.

First, we examine the formation of personal relationships from the dyadic

perspective as a function of proximity and incentive factors, including

among regressors various proxies of socioeconomic distance computed as

differences in pre- and post-migration individual characteristics. In our

baseline definition, a link between two immigrants exists if they talk to

CThe editors of The Scandinavian Journal of Economics 2014.