Rational inattention and migration decisions

Simone Bertoli, Jesús Fernández-Huertas Moraga, Lucas Guichard

Acquiring information about destinations can be costly for migrants. We model information frictions in the rational inattention framework and obtain a closed-form expression for a migration gravity equation that we bring to the data. The model predicts that ows from countries with a higher cost of information or stronger priors are less responsive to variations in economic conditions at destination, as migrants rationally get less information before deciding where to move. The econometric analysis reveals systematic heterogeneity in the pro-cyclical behavior of migration flows across origins that is consistent with the existence of information frictions.

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Year of publication:	March 2020
Authors:	Bertoli, Simone ; Fernández-Huertas Moraga, Jesús ; Guichard, Lucas
Publisher:	Bonn, Germany : IZA - Institute of Labor Economics
Subject:	international migration \| information \| rational inattention \| gravity equation \| Theorie \| Theory \| Informationsverhalten \| Information behaviour \| Internationale Migration \| International migration \| Gravitationsmodell \| Gravity model \| Rationalität \| Rationality \| Information