Network Migration Premium

A few years ago, I read an article in The Economist (sorry, I haven't been able to find it) that contained a graphic detailing the cost of international human smuggling to certain destinations in the United States. I used that data in a college-level geography course I was teaching at a local community college. I asked the students to explain the variance in cost. One border crossing should be as good as any other one. Why can smugglers charge more to go from Mexico to Phoenix as opposed to delivering the undocumented to Nogales?

Students struggled to model the migration. The lesson complicates rational choice theory. Moving from Mexico to the United States is easy enough to understand. The exact destination within the US is another story.

The price for going from China to New York City stands out. I recall it being $10k. Why so dear? Certainly, there are much cheaper alternatives. The rub is demand. NYC is the place to be:

“Everybody wants to come to New York because New York is the starting point for going global,” said Xue Ya, president of the China Center, a business and cultural organization that was the first tenant to sign a lease at 1 World Trade Center, where it will occupy six floors. Once established in New York, Mrs. Xue said, “you are a player.”

Chinese are paying through the nose to be a player. The thinking that informs this migration blows a big hole in Richard Florida's Creative Class theory. Tolerance doesn't matter. The motivation to be in New York isn't dependent on whether or not there is a welcoming committee. Talent will put up with a lot of inconvenience and outright hostility to be in a place that helps them extend their creative (and earning) potential.

Network migration does a better job of mapping illegal cross border relocation. You either go where you know or where everyone else you know is going. Tolerance be damned.