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The Short-and Long-Run Determinants of Unskilled Immigration into US States

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Abstract

This paper uses a gravity model of migration to analyze how income differentials affect the flow of immigrants into U.S. states. We add to existing literature by decomposing income differentials into short- and long-term components and by focusing on newly arrived unskilled immigrants between 2000-2008. Our sample is unique in that 95 percent of our observed immigrant flows equal zero. The trade literature has advocated using the Eaton and Tamura (1994) threshold Tobit model in similar settings, and we are the first to apply the methodology to analyze the determinants of immigration. We find that recent U.S. immigrants positively respond to differences in long-term (or trend) GDP between origin countries and U.S. states. When appropriately accounting for the zero values, we also find that differences in GDP fluctuations significantly affect the flow of unskilled immigrants. In addition, we find that short-run GDP fluctuations pull unskilled immigrants into certain U.S. states, whereas GDP levels push unskilled immigrants out of their countries of origin.

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File URL: http://commons.colgate.edu/cgi/viewcontent.cgi?article=1012&context=econ_facschol
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Bibliographic Info

Paper provided by Department of Economics, Colgate University in its series Working Papers with number 2010-06.

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Date of creation: 24 Aug 2010
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Handle: RePEc:cgt:wpaper:2010-06

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Keywords: immigration; macroeconomics; GDP; gravity;

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References

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  1. Lewer, Joshua J. & Van den Berg, Hendrik, 2008. "A gravity model of immigration," Economics Letters, Elsevier, vol. 99(1), pages 164-167, April.
  2. Hatton, Timothy J. & Williamson, Jeffrey G, 2002. "What Fundamentals Drive World Migration?," CEPR Discussion Papers 3559, C.E.P.R. Discussion Papers.
  3. Borjas, George J, 1999. "Immigration and Welfare Magnets," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 607-37, October.
  4. Pavel Svaton & Thierry Warin, 2007. "European Migration: Welfare Migration or Economic Migration?," International Trade and Finance Association Conference Papers 1095, International Trade and Finance Association.
  5. Mandelman, Federico S. & Zlate, Andrei, 2012. "Immigration, remittances and business cycles," Journal of Monetary Economics, Elsevier, vol. 59(2), pages 196-213.
  6. David Karemera & Victor Iwuagwu Oguledo & Bobby Davis, 2000. "A gravity model analysis of international migration to North America," Applied Economics, Taylor & Francis Journals, vol. 32(13), pages 1745-1755.
  7. George J. Borjas, 2001. "Does Immigration Grease the Wheels of the Labor Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(1), pages 69-134.
  8. Lewer, Joshua J. & Pacheco, Gail & Rossouw, Stephanié, 2009. "Do Non-Economic Quality of Life Factors Drive Immigration?," IZA Discussion Papers 4385, Institute for the Study of Labor (IZA).
  9. Adriana Kugler & Mutlu Yuksel, 2008. "Effects of Low-Skilled Immigration on U.S. Natives: Evidence from Hurricane Mitch," CReAM Discussion Paper Series 0809, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  10. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
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Cited by:
  1. Alicia Adsera & Mariola Pytlikova, 2012. "The role of language in shaping international migration," Norface Discussion Paper Series 2012014, Norface Research Programme on Migration, Department of Economics, University College London.
  2. Simone Bertoli & Jesus Fernández-Huertas Moraga, 2012. "Visa Policies, Networks and the Cliff at the Border," Working Papers 2012-12, FEDEA.
  3. Bertoli, Simone & Fernández-Huertas Moraga, Jesús, 2013. "Multilateral resistance to migration," Journal of Development Economics, Elsevier, vol. 102(C), pages 79-100.

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