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How Does the Internet Affect Migration Decisions?

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How does the Internet affect migration decisions?
Hernan Winkler∗

Abstract

This paper provides new evidence on the impact of the internet on migration decisions. I find that an
increase in internet adoption among migrant-sending countries reduces the stock of migrants from
these locations. The results are robust to a number of specifications, including an instrumental variable
approach that addresses the endogeneity of internet adoption. The findings suggest that the internet
may weaken the importance of push factors in the decision to migrate, and that these effects outweigh
declines in mobility costs.

JEL classification: F22; O33; L86

Keywords: The internet; Migration; Gravity equation

1. Introduction

There is a large body of literature about the determinants of migration decisions, 1 which often classifies
the determinants of migration into push and pull factors. At the same time, migration decisions are
affected by mobility constraints, such as quotas, moving costs and information barriers. This paper
estimates if the internet, through its effects on push and pull factors as well as on mobility constraints,
has affected migration to OECD countries.

There are several channels through which the internet could affect migration decisions. On the one
hand, the internet could have a similar effect to that of diasporas (Beine et al. 2011). By lowering the
cost of communication across borders or by facilitating the access to information about the destination
country, the internet can increase the probability to migrate for the marginal individual (Dekker et al.
2015; Vilhelmson et al. 2013). The internet can also reduce other mobility costs, such as visa procedures
and travel logistics (Choo et al. 2007). On the other hand, the internet can lower the importance of push
factors in the decision to migrate. By increasing trade or FDI flows (Choi 2003; Choi 2010; Fink et al.
2005; Freund and Weinhold 2004) as well as the demand for skilled workers (Akerman et al. 2015), the
internet could contribute to economic growth and job creation in the home country (Czernich et al.
2011), thereby lowering the incentives to migrate. The internet can also improve institutions at home,
further disincentivizing migration (Elbahnasawy 2014). Finally, the internet may weaken pull factors by
allowing individuals to work remotely online, thereby removing the necessity to physically relocate in
another country (Agrawal et al. 2013).

∗
The World Bank, 1818 H St NW, MC 7-711, 20433, e-mail: hwinkler@worldbank.org, phone number: +1 202-473-
8594
1
See Mayda (2010) for a review of the literature.
To my knowledge, this is the first paper to examine the impact of the internet on migration. By
estimating a gravity equation for bilateral migration stocks, I find that an increase in internet adoption
among migrant-sending countries reduces the stock of migrants born in these economies. These results
are robust to several specifications, including one addressing the endogeneity of internet adoption.

2. Model and data

I estimate the following gravity model of migration: 2

𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑖𝑖,𝑗𝑗,𝑡𝑡 = 𝛼𝛼 + 𝛽𝛽 𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑗𝑗,𝑡𝑡−5 + 𝛾𝛾 𝑟𝑟𝑟𝑟𝑟𝑟_𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖,𝑗𝑗,𝑡𝑡 + 𝛿𝛿 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑗𝑗,𝑡𝑡 + 𝜇𝜇𝑖𝑖,𝑗𝑗 + 𝜈𝜈𝑖𝑖,𝑡𝑡 + 𝜀𝜀𝑖𝑖,𝑗𝑗,𝑡𝑡 (1)

Where 𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑖𝑖,𝑗𝑗,𝑡𝑡 is the logarithm of the number of individuals born in country j living in country i in the
year t, where t=1990, 2000, 2010. The variable 𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖 is the logarithm of the number of internet
users per 100 people in the home country, 𝑟𝑟𝑟𝑟𝑟𝑟_𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖 is the logarithm of the ratio of the GDP per
capita in purchasing power parity at destination over that of the home country and 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 is the
log of the population of the country of birth. I introduce the internet variable with a five-year lag to
alleviate the endogeneity concerns of using contemporaneous values. The country pairs fixed effects 𝜇𝜇𝑖𝑖,𝑗𝑗
absorb any time-invariant factors affecting bilateral migration stocks, while the fixed effects 𝜈𝜈𝑖𝑖,𝑡𝑡 control
for any changes in the country of destination over time, such as GDP growth. I focus on the effects of
internet adoption among migrant-sending economies because the sample of destination countries
includes only 33 OECD economies, resulting in very limited variation in internet access across these
countries. Table 1 shows some descriptive statistics.

Table 1. Descriptive Statistics

Number of Observations Means

Internet Users Population Population GDP per capita PPP GDP per capita PPP
Country Pairs with Migrant Stock Internet Users
Year Country Pairs Migrant Stock (Receiving (Sending (Receiving (Sending (Receiving
Positive Migration (excluding zeroes) (Sending Country)
Countries) Countries) Countries) Countries) Countries)

1990 6,072 3,555 6,780 11,581 0.0 0.0 28,046,770 31,035,342 12,289 26,033
2000 6,072 4,219 11,783 16,958 0.9 3.0 32,388,334 33,615,319 14,890 31,700
2010 6,072 4,417 15,237 20,946 20.7 54.8 36,463,821 36,086,993 17,528 35,724

3. Results

Table 2 shows the main results. Column (1) displays the OLS estimates of equation (1) including country
pairs with zero migration values. The coefficient 𝛽𝛽 is negative and statistically significant, showing that a
10 percent increase in internet penetration in the source country is accompanied by a 1 percent
decrease in the stock of migrants born there. Given that the OLS estimates of log-linearized models
when many observations of the dependent variable are zero may be biased, column (2) shows the
Poisson pseudo-maximum-likelihood (PPML) of equation (1). 3 Even though the coefficients are smaller,
they are still negative and statistically significant. Column (3) shows that the estimated coefficient is also
negative when observations with zero migration values are excluded.

2
This is based on Lewer and Van den Berg (2008).
3
see Santos Silva and Tenreyro, 2006
Table 2. Gravity Model Estimates

log(migration stock)
OLS PPML OLS
(1) (2) (3)

log(internet) -0.100*** -0.0579*** -0.195***

(0.0226) (0.00830) (0.0137)
Log(relative GDP per capita PPP) 0.0666 0.0491* 0.101**
(0.0731) (0.0254) (0.0424)
Log(population) -0.0582 0.117** -0.157**
(0.119) (0.0457) (0.0730)

Country Pairs FE YES YES YES

Receiving Country-Year FE YES YES YES

Observations 14,261 14,261 10,263

R-squared 0.467 0.603
No. of Pairs 5,634 5,634 4,764

Standard errors in parentheses

*** p<0.01, ** p<0.05, * p<0.1

Table 3 shows some robustness checks for the sample that excludes migrant stocks with zero values. To
check if the results are driven by a changing educational structure, column (1) controls for the share of
individuals with complete secondary and tertiary education in the sending country. Column (2) controls
for the level of GDP per capita PPP in the sending country, instead of its relative value. To verify that the
results are not driven by declining unemployment rates in the sending country, column (3) controls for
the unemployment rate in the sending economy and column (4) controls for the unemployment rate
relative to that of the receiving country. Finally, columns (5) and (6) estimate equation (1) for each sub-
period 1990-2000 and 2000-2010. The relationship between internet adoption and migration remains
negative and statistically significant across all specifications.

Table 3. Alternative Specifications of the Gravity Model

Dependent variable: log(migrant stock)
Controlling for Controlling for
Controlling for Controlling for 1990-2000 2000-2010
GDP per capita relative
education unemployment Sample Sample
level unemployment
(1) (2) (3) (4) (5) (6)

log(internet) -0.183*** -0.194*** -0.198*** -0.197*** -0.125*** -0.0912***

(0.0158) (0.0136) (0.0137) (0.0138) (0.0274) (0.0177)

Country Pairs FE YES YES YES YES YES YES

Receiving Country-Year FE YES YES YES YES YES YES
Relative GDP and population YES YES YES YES YES YES

Observations 8,731 10,276 9,702 9,702 6,229 7,018

R-squared 0.614 0.603 0.614 0.614 0.650 0.440
No. of Pairs 3,897 4,764 4,449 4,449 4,050 4,429
Standard errors in parentheses
*** p<0.01, ** p<0.05, * p<0.1
Even though internet penetration is introduced with a five-year lag to alleviate endogeneity concerns,
the OLS estimate of 𝛽𝛽 could still be biased if unobservable variables affect both lagged internet use and
contemporaneous migration decisions. For instance, an improvement in the quality of education may
foster internet adoption among firms and workers, which at the same time may increase or decrease
the incentives for some individuals to leave the country. To address these issues, I use an instrumental
variable for internet adoption. More specifically, I use the number of years since the date of
liberalization of the telecommunications sector as an instrument for internet adoption, as
telecommunications’ reforms aimed at improving the availability and affordability of the internet have
increased internet adoption across the world (Howard and Mazaheri, 2009). This instrument would
capture the increase in internet adoption driven by the supply side and not by changes in the
characteristics of the population that may increase the demand for this service such as skills upgrading,
which may in turn affect migration decisions. In order to be a valid instrument, the reform should also
not be correlated with other policies that may affect migration decisions. In particular, countries more
averse to lowering information barriers for their citizens may also be less likely to implement reforms
aimed at reducing the control of the government over the economy. To mitigate these concerns, I add
as control variables the Freedom House indexes for political rights and civil liberties. The instrumental
variables model is given by these first and second stage equations, respectively:
3 3
𝑘𝑘 𝑘𝑘
𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑗𝑗,𝑡𝑡−5 = 𝜌𝜌0 + � 𝜑𝜑𝑘𝑘 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑘𝑘,𝑗𝑗,𝑡𝑡−5 + 𝜌𝜌1 𝑟𝑟𝑟𝑟𝑟𝑟_𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖,𝑗𝑗,𝑡𝑡 + 𝜌𝜌2 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑗𝑗,𝑡𝑡 + � 𝜌𝜌2+𝑘𝑘 𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝑗𝑗,𝑡𝑡 + 𝜋𝜋𝑖𝑖,𝑗𝑗
𝑘𝑘=1 𝑘𝑘=1
+ 𝜏𝜏𝑖𝑖,𝑡𝑡 + 𝜖𝜖𝑖𝑖,𝑗𝑗,𝑡𝑡
𝑘𝑘
� 𝚥𝚥,𝑡𝑡−5 + 𝛾𝛾 𝑟𝑟𝑟𝑟𝑟𝑟_𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖,𝑗𝑗,𝑡𝑡 + 𝛿𝛿 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑗𝑗,𝑡𝑡 + ∑3𝑘𝑘=1 𝜃𝜃 𝑘𝑘 𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝑗𝑗,𝑡𝑡
𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑖𝑖,𝑗𝑗,𝑡𝑡 = 𝛼𝛼 + 𝛽𝛽 𝚤𝚤𝚤𝚤𝚤𝚤𝚤𝚤𝚤𝚤𝚤𝚤𝚤𝚤𝚤𝚤 + 𝜇𝜇𝑖𝑖,𝑗𝑗 + 𝜈𝜈𝑖𝑖,𝑡𝑡 + 𝜀𝜀𝑖𝑖,𝑗𝑗,𝑡𝑡

Where the instruments 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑘𝑘,𝑗𝑗,𝑡𝑡−5 (k=1,2,3) are dummy variables equal to one after 0, 5 and 10
years since the liberalization of the telecommunications sector. Table 4 shows the instrumental variable
estimates. First of all, it shows that the instrument is highly correlated with the dependent variable, as
the first stage coefficients associated with the years since the telecommunications reforms were
implemented are statistically significant. The second stage results show that internet adoption in the
sending country leads to a decline in bilateral migration stocks. More precisely, a 10 percent increase in
the number of internet users per 100 people in the sending country decreases bilateral migration stocks
by about 4.4 percent. Adding additional controls in columns (3) and (5) reduces the absolute value of the
coefficient, but it is still negative and statistically significant.
Table 4. Instrumental Variables Results

IV First Stage IV First Stage IV First Stage

log(migration stock) log(internet) log(migration stock) log(internet) log(migration stock) log(internet)

log(internet) -0.444*** -0.343*** -0.362***

(0.0511) (0.0506) (0.0663)
0-4 years after reform 0.529*** 0.514*** 0.529***
(0.0296) (0.0302) (0.0323)
5-9 years after reform 0.348*** 0.423*** 0.442***
(0.0526) (0.0529) (0.0535)
10+ years after reform 1.250*** 1.173*** 1.199***
(0.0772) (0.0768) (0.0785)

Country Pairs FE YES YES YES YES YES YES

Receiving Country-Year FE YES YES YES YES YES YES
Fredom House indexes NO NO YES YES YES YES
Unemployment and human capital NO NO NO NO YES YES
Relative GDP and population YES YES YES YES YES YES

Observations 8,049 8,049 7,452 7,452 6,746 6,746

R-squared 0.589 0.878 0.603 0.884 0.618 0.883
No. of Pairs 3,099 3,099 2,891 2,891 3,279 3,279

Standard errors in parentheses

*** p<0.01, ** p<0.05, * p<0.1

4. Concluding remarks

Using different specifications and an instrumental variable for internet adoption, this paper is the first to
document a strong and negative association between internet adoption and bilateral migration stocks.
This finding suggests that the internet may weaken the importance of push factors in the decision to
migrate, and that these effects dominate any declines in mobility costs associated with this new
technology. Disentangling the impacts of these different mechanisms is an important avenue for future
research.

Data:

Migration stocks: OECD-DIOC database for the years 2000 and 2010, and from Artuc et al. (2013) for
1990.

Internet users, GDP per capita, population and unemployment rates: Word Development Indicators
(WDI, World Bank).

Educational attainment: Share of adult high school and college graduates in 1990, 2000 and 2010, from
the Barro-Lee dataset

Freedom House indexes: Civil Liberties score (1 (best) to 7 (worst)), Political Rights score (1 (best) to 7
(worst)). I also include Country Status dummy variables (Free, Part Free), which are constructed by
averaging each pair of political rights and civil liberties ratings to determine an overall status of “Free,”
“Partly Free,” or “Not Free.” Those whose ratings average 1.0 to 2.5 are considered Free, 3.0 to 5.0
Partly Free, and 5.5 to 7.0 Not Free
Telecommunications reforms: Year of liberalization of the international telecommunications sector,
from Telegeography.

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