Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/74085
Authors: 
Vergalli, Sergio
Year of Publication: 
2006
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 4.2006
Abstract: 
In this paper, we present a theoretical model that, implementing the pioneering work of Burda (1995), based on the Real Option Theory, investigates the roots of the migration dynamics. In the model the decision to migrate of each individual depends not only on the wage differential, but also on a U-shaped benefit function of a community of homogeneous ethnic individuals, modelled according to the theory of clubs. The theoretical results are able to give an explanation to the observable jumps in the migration flows and to describe how the trigger for entry can change depending on the dimension of the district. The analysis of the results also sheds light on the dynamics of the districtsÂ’ development: some possible rigidities in the adjustment of the district dimension, as regards the optimal levels, could magnify the hysteresis process.
Subjects: 
Migration
Real option
Theory of clubs
Network effect
JEL: 
F22
H49
O15
R23
Document Type: 
Working Paper

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