# 1 Introduction

This paper investigates how existing diasporas or networks (i.e. stock of immigrants of own national background already resident in a given destination) impact the number, skill composition and geographical concentration of new migrants. The role of the diaspora on migration flows is well known and undisputed. The contribution of this paper is both methodological and empirical. Using global aggregate data, we show that diasporas not only influence the future flows but also their other characteristics, such as composition and concentration. We present various econometric and data challenges that are relevant in this literature, discuss how we try to resolve them and show how different empirical methods influence the results. In order to guide our thinking on the diaspora effects, we construct a unified yet simple theoretical framework based on various bilateral factors that influence migration costs. Among the main determinants of migration costs are distance, linguistic overlap, political bonds such as colonial links.

We argue that diaspora externalities influence migration patterns (flow size, skill composition and concentration) through their effect on bilateral migration costs. These diaspora externalities operate through two main channels. First, diasporas reduce assimilation and information costs for newcomers. They help them with jobs, housing, education and various cultural adjustment issues. Second, diasporas attract new migrants through family reunion programs and other venues that lower legal migration barriers. Assessing the combined effect of these two channels is key to understand the dynamics of the size and composition of migration flows.

Until recently, the analysis of diaspora externalities has been conducted at the micro level (see Boyd, 1989, Massey, 1993, Munshi, 2003, McKenzie and Rapoport, 2010). Individual or household level micro data have multiple advantages such as detailed information on demographic, human capital, social and economic parameters. However a major drawback of those micro approaches is that they can only focus on a limited number of migration corridors at time (e.g. the Mexican-US corridor) and can hardly be generalized to other country pairs. An exception is provided by Beine et al (2010) who use bilateral macrodata on migration flows and stocks. They took advantage of a recent data set on international migration by educational attainment to investigate the role of diaspora size on the educational structure of migration from 195 countries to the 30 OECD countries. Their paper shows that networks are by far the most important determinant of migration flows, explaining 71 percent of the observed variability of the size of migration flows, and 47% of the variability of the selection ratio in 2000.

In this paper, we extend the study of Beine et al. by looking at the diaspora effect on the geographical concentration or dispersion of new migrants, and by comparing results obtained with different estimation techniques. Indeed, a macro analysis of diaspora externalities raises multiple econometric problems. The main issues are the large number of empty corridors (due to truncation rules or true ’zeroes’), and the difficulty to identify causation (unobserved variables 2