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IZA Discussion Paper No. 4234
June 2009
Network Formations among Immigrants and Natives

In this paper we examine possible network formations among immigrants and natives with endogenous investment. We consider a model of a network formation where the initiator of the link bears its cost while both agents benefit from it. We present the model by considering possible interactions between immigrants and the new society in the host country: assimilation, separation, integration and marginalization. The paper highlights different aspects of immigrants’ behavior and their interaction with the members of the host country (society) and their source country (society). We found that when the stock of the immigrants in the host country increases, the immigrants' investment in the middlemen increases and the natives may bear the cost of link formation with the middlemen.

Communications
Mark Fallak
mark.fallak@liser.lu
+352 585-855-526
World of Labour
Olga Nottmeyer
olga.nottmeyer@liser.lu
+352 585-855-501
Network Coordination
Christina Gathmann
christina.gathmann@liser.lu

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