International Economics Seminar Series: Benefits and Costs of Migrant Networks with Yulu Tang, Dartmouth

At this week’s International Economics seminar, Yulu Tang, a Postdoctoral Fellow at Dartmouth College, presented her research article, “To Follow the Crowd? Benefits and Costs of Migrant Networks.” 

Based on data on millions of migrant workers in China, this study quantifies the benefits and costs associated with workers from the same county of birth clustering within the same industry and location. Her findings highlight that peer learning within these clusters increases worker productivity. However, when the size of clusters grows bigger, congestion effects emerge during negative hometown shocks. This leads to more competition and lower real wages precisely when migrant workers have the greatest desire to earn. With a model trading off these two forces, her analysis suggests that insurance against hometown-specific shocks can lower clustering and increase overall productivity.