red-tape for migration. The migration choice depends on individual maximization of utility, and the potential migrant chooses the destination country that maximizes the individual’s expected well-being. Beyond the push and pull factors (see Hatton 2005 and Mayda 2010),<sup>9</sup> the previous literature highlighted the role of migration-related policies in affecting the bilateral settlement of immigrants (Ortega and Peri, 2013; Bertoli and Fernández-Huertas Moraga, 2015). We nest the role of migration-related policies in a structural gravity model for migration that we then test in section 4.

The representative individual _h_ , residing in country _i_ , has to decide the optimal location _j_<sup>_∗_</sup> from a set of possible destinations _j ∈ J_ .<sup>10</sup> The optimal destination _j_<sup>_∗_</sup> is obtained by maximizing: _j_<sup>_∗_</sup> = _argmaxj∈J Uhijt_ . In line with previous papers deriving the gravity model for migration (Anderson, 2011; Bertoli and Fernández-Huertas Moraga, 2013), the utility from migrating from _i_ to destination _j_ , _Uhijt_ , depends on the wage in destination country _j_ ( _wjt_ ), and on the bilateral cost of migration from country _i_ to country _j_ at a given point in time _t_ , _cijt_ . The log-linear utility function for the potential migrants has the following form: The unobservable component of the log-linear utility _ln_ ( _ξhjit_ ) captures all the individual specific unobservable factors affecting the location decision.<sup>11</sup> Under the assumption that the idiosyncratic component _ln_ ( _ξhjit_ ) is distributed as type-1 extreme value, the probability of migration from country _i_ to country _j_ , _pijt_ , follows the multinomial logit form (McFadden, 1973): If all individuals in _i_ extract the same utility from migrating to _j_ (except for the random component _ξhjit_ ) the probability in equation (2) is equal to the share of individuals in _i_ that find it optimal to migrate to _j_ ; and the predicted migration flow from _i_ to _j_ can be expressed

> 9Empirical studies on the determinants of migration flows (Hatton, 2005; Mayda, 2010) highlight the following economic determinants of migration: (i) income and employment rate in destination country as “pull” factors (expectations of future standards of living); (ii) income and income inequality in origin countries as “push” factors; (iii) bilateral migration costs of travel (related to geographic distance or common language); (iv) existence in destination countries of migrant networks, which reduce the information cost of migration (by easing the integration of new immigrants in the destination country).

> 10 To consider the non-migration option, the set of destinations _J_ includes also the current country of residence _i_ .

> 11The utility function of potential migrants in _i_ can be augmented to consider also the overall attractiveness of destination _j_ at time _t_ (often proxied in the literature by non-income pull factors, or magnets, such as the employment rate at destination or other amenities that the potential migrant may value at destination _j_ ). In our framework this simply corresponds to a broader interpretation of the parameter _wjt_ .

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