Friday, 15 February 2019

How the internet affects international migration decisions

In the 1960s, Everett Lee came up with a model of migration decisions (ungated version here) that remains the most widely used theory of what determines peoples' migration decisions. Lee emphasised that there are: (1) push factors - things in the origin that cause people to want to move away, like low wages or high unemployment; and (2) pull factors - things in the destination that cause people to want to move there, like high wages or low unemployment. Push factors can be positive (they make you want to move away), or negative (they make you want to stay), and likewise pull factors can be positive (they make you want to move there) or negative (they make you not want to move there). A third factor has been added to these push and pull factors - facilitating factors, or things that make migration easier, like a simplified visa process.

With the theory out of the way, we can now consider how the internet might affect international migration decisions. The internet facilitates improved communication, including between diasporas and those living in their home country. So, perhaps greater internet access might make migration easier, by increasing the flow of information about how or where to migrate to.

Alternatively, maybe the internet facilitates outsourcing of jobs to previously lower-income countries, increasing job prospects and incomes in the origin, and reducing migration (a negative push factor), or allowing people to work for a firm in the destination country without having to leave the origin country (a negative pull factor). Or maybe the internet facilitates access to goods or services (e.g. Netflix) that previously weren't available in the origin country, improving the quality of life there (again, a negative push factor).

So, it isn't clear from the theory whether the internet would increase, or decrease, international migration. What do the data say? A 2017 article by Hernan Winkler (World Bank), published in the journal Applied Economics Letters (I don't see an ungated version, but it appears to be open access), provides some answer. Winkler estimated a gravity model (which I have previously discussed here) using data from 6072 origin-destination pairs of countries over the period 1990-2010. He found that:
...a 10% increase in internet penetration in the source country is accompanied by a 1% decrease in the stock of migrants born there.
That was based on the simplest model he reported, but other models supported that the internet reduced migration. He also found similar results using an instrumental variables approach, which implies that the results are causal - that is, the internet caused a reduction in international migration. Winkler concluded that:
...the internet may weaken the importance of push factors in the decision to migrate, and that these effects dominate any declines in mobility costs associated with this new technology.
This isn't the last word on this, but it is consistent with a story that the internet is associated with job outsourcing from high-income countries to low-income countries, and weakens the incentives for workers from low-income countries to migrate. Maybe, rather than building a wall, the U.S. should be building out internet infrastructure in low-income countries?

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