Working Paper: NBER ID: w20428
Authors: Ethan Lewis; Giovanni Peri
Abstract: In this chapter we analyze immigration and its effect on urban and regional economies focusing on productivity and labor markets. While immigration policies are typically national, the effects of international migrants are often more easily identified on local economies. The reason is that their settlements are significantly concentrated across cities and regions, relative to natives. Immigrants are different from natives in several economically relevant skills. Their impact on the local economy depends on these skills. We emphasize that to evaluate correctly such impact we also need to understand and measure the local adjustments produced by the immigrant flow. Workers and firms take advantage of the opportunities brought by immigrants and respond to them trying to maximize their welfare. We present a common conceptual frame to organize our analysis of the local effects of immigration and we describe several applications. We then discuss the empirical literature that has tried to isolate and identify a causal impact of immigrants on the local economies and to estimate the different margins of response and the resulting outcomes for natives of different skill types. We finally survey promising recent avenues for advancing this research.
Keywords: immigration; urban economics; regional economics; labor markets; productivity
JEL Codes: F22; J61; R23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| influx of immigrants (J11) | local economic performance (R11) |
| areas with higher concentrations of immigrants (J61) | more pronounced economic impacts (F69) |
| regions with fewer immigrants (R23) | negligible effects (F69) |
| competition from immigrants (K37) | increased competition for natives in similar skill occupations (J69) |
| complementarities in skills (J24) | benefits for certain natives (H55) |