Immigrants’ location choice in Belgium

This paper analyzes international migration streams to Belgian municipalities between 1994 and 2007. The Belgian population register constitutes a rich and unique database of yearly migrant inflows and stocks broken down by nationality, allowing us to empirically explain the location choice of newly arriving immigrants at the municipality level. Specifically, we aim at separating the network effect from other location-specific characteristics such as local labor or housing market conditions and the presence of public amenities. Our main contribution to the migration literature is to model labor and housing market variables as operating at different levels, assuming that immigrants first select a region roughly corresponding to a labor market and subsequently choose a municipality within this region that maximizes their utility. Among other things, this allows us to shed new light on the still ongoing discussion in the literature concerning the impact of labor market characteristics on the location of immigrants. We find that the spatial repartition of immigrants in Belgium is determined by both network effects and local characteristics. The relative importance of the determinants of location choice varies by nationality, as expected, but for all nationalities, local factors matter more than networks.