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Abstract for:

The Contribution of Foreign Migration to Local Labor Market Adjustment

Michael  Amior,  November 2018
Paper No' CEPDP1582: | Full paper (pdf)
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Keywords: migration, geographical mobility, local labor markets, employment

JEL Classification: J61; J64; R23

Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: CEP Discussion Papers
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Abstract:

The US suffers from large regional disparities in employment rates which have persisted for many decades. It has been argued that foreign migration offers a remedy: it “greases the wheels” of the labor market by accelerating the adjustment of local population. Remarkably, I find that new migrants account for 30 to 60 percent of the average population response to local demand shocks since 1960. However, population growth is not significantly more responsive in locations better supplied by new migrants: the larger foreign contribution is almost entirely offset by a reduced contribution from internal mobility. This is fundamentally a story of “crowding out”: I estimate that new foreign migrants to a commuting zone crowd out existing US residents one-for-one. The magnitude of this effect is puzzling, and it may be somewhat overstated by undercoverage of migrants in the census. Nevertheless, it appears to conflict with much of the existing literature, and I attempt to explain why. Methodologically, I offer tools to identify the local impact of immigration in the context of local dynamics.