Ethnic and Economic Determinants of Migrant Location Choice

This chapter addresses the determinants of migrant location choice within the migrant’s adopted country. We focus on two sets of location determinants: economic determinants and ethnic (country of origin) determinants. Ethnic determinants are found to be important across a wide range of studies. By contrast, prior literature indicates that impacts of economic factors differ according to the characteristics both of locations and of migrants. The first part of the chapter summarises key findings of prior studies into migrant location choice, focusing on economic and ethnic determinants. Much of the literature in this field relates to migrants to the United States of America. The second part of the chapter extends knowledge of migrant location choice by considering another country that hosts a high proportion of international migrants, New Zealand. We draw on unit record New Zealand census data from 2013 for this analysis. The importance of ethnic (country of origin) networks is confirmed in this analysis but so too is the importance of economic factors. The latter finding is in contrast to much of the US based literature. It plausibly reflects the greater emphasis that New Zealand places on skills-based migration relative to the United States. At a technical level, this study uses the average regional wage of the industry in which the migrant is employed, together with region fixed effects, which may contribute to more precise estimates of wage effects than does the more standard use of average regional wages.