The dynamics of migration in the presence of chains

The experience of several host countries shows that small initial inflows of migrants have a perpetuating effect on further migration from the same country of origin. This paper studies the interplay of factors that determine the transitional dynamics of migration flows in the presence of social relationships between migrants. We fully specify and formally solve a stochastic two-country model of chain migration with one sending and one receiving country in which initial immigration patterns matter for future immigration patterns. Numerical calculations illustrate the crucial role of the wage elasticity of labor demand in counteracting the potential explosiveness of chain migration. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: F22; J61; J63.