Where Do Migrants Go? Risk-Aversion, Mobility Costs and the Locational Choice of Migrants.

As part of their efforts to pool individual risks, households consider spreading their members over a multiplicity of locations both within their country of origin and abroad. At the same time, the world has innumerable Chinatown and Little Italies : when people move they tend to bunch in the same location. Bunching would appear to be fundamentally at odds with the desire for risk diversification. In this paper we provide a framework to reconcile spatial bunching and spreading of migrants, combining risk-aversion and concavity of mobility costs at the household level.