Social Networks and Internal Migration: Evidence from Facebook in India

Despite potentially large economic returns, rates of internal migration remain low in many developing countries. This paper uses new, de-identified data from Facebook to quantify the role of social networks in explaining this development puzzle. We study this question in India, a country that exhibits substantial wage dispersion across regions but remains relatively under-urbanized. Detailed records of nearly 20 million individuals on the evolution of social connections and residential choice reveal that networks and migration are strongly linked. Across several identification strategies, a model of migration suggests that social networks account for roughly 20% of the relationship between migration and distance. We develop a simple, static model of spatial equilibrium, which suggests that equalizing social connections across locations increases average wages by 3% (24% for the bottom wage-quartile) through increased migration. This impact is larger than fully removing the marginal effect of distance in migration decisions, akin to building rapid transport infrastructure. Taken together, our data suggest that - by reducing migration frictions - increasing social connections across space may have considerable economic gains. We provide suggestive evidence for economic and emotional support mechanisms underlying network effects and show that college attendance can boost the size and diversity of social networks by 20%.