The Role of Social Networks in Determining Migration and Labour Market Outcomes

Abstract

This paper empirically examines social network explanations for migration decisions in the context of German reunification. Using longitudinal data from the German Socio-Economic Panel, we first show that the presence of a family in West Germany is an important predictor for the migration hazard rate of East Germans. We then explore whether pre-migration networks have a discernible impact on the economic and social assimilation of East German immigrants in West Germany. We find that East German immigrants are more likely to be employed and to hold higher paying jobs when socially connected to the West prior to emigrating.