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Immigration and Trade Creation for the U.S.: The Role of Immigrant Occupation

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  • Mundra, Kusum

    ()
    (Rutgers University)

Abstract

This paper highlights that the immigrants' effect on trade is not identical across all types of immigrants but it varies with the immigrants' occupation. Using a sample of 63 U.S. trading partners which are also big immigrant sending countries over the years 1991-2000, this paper finds that the immigrant trade elasticity for the no occupation group is similar in magnitude to the immigrant effect on trade estimated in the literature. However, this does not capture the full extent of the effect of immigrant network on trade. The share of professional immigrants in comparison to immigrants with no occupation significantly increases the trade elasticity for Rauch's referenced price and differentiated commodities and this effect is strongest for the differentiated goods. This paper establishes that immigrants' occupation is an important indicator of the quality and effectiveness of immigrants' network in trade creation with the home country.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7073.

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Length: 30 pages
Date of creation: Dec 2012
Date of revision:
Handle: RePEc:iza:izadps:dp7073

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Related research

Keywords: immigrant occupation; immigrant networks; bilateral trade; U.S.;

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References

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  1. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
  2. Gould, David M, 1994. "Immigrant Links to the Home Country: Empirical Implications for U.S. Bilateral Trade Flows," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 302-16, May.
  3. Subhayu Bandyopadhyay & Cletus C. Coughlin & Howard J. Wall, 2005. "Ethnic Networks and U.S. Exports," Working Papers 05-15old1 Classification-, Department of Economics, West Virginia University.
  4. James E. Rauch & Alessandra Casella, 1998. "Overcoming Informational Barriers to International Resource Allocation: Prices and Group Ties," NBER Working Papers 6628, National Bureau of Economic Research, Inc.
  5. Wagner, Don & Head, Keith & Ries, John, 2002. "Immigration and the Trade of Provinces," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(5), pages 507-25, December.
  6. Combes, Pierre-Philippe & Lafourcade, Miren & Mayer, Thierry, 2003. "Can Business and Social Networks Explain the Border Effect Puzzle?," CEPR Discussion Papers 3750, C.E.P.R. Discussion Papers.
  7. Pia M. Orrenius & Madeline Zavodny, 2003. "Does immigration affect wages? A look at occupation-level evidence," Working Papers 0302, Federal Reserve Bank of Dallas.
  8. Robert C. Feenstra & Robert E. Lipsey & Haiyan Deng & Alyson C. Ma & Hengyong Mo, 2005. "World Trade Flows: 1962-2000," NBER Working Papers 11040, National Bureau of Economic Research, Inc.
  9. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November.
  10. Dunlevy, James A. & Hutchinson, William K., 1999. "The Impact of Immigration on American Import Trade in the Late Nineteenth and Early Twentieth Centuries," The Journal of Economic History, Cambridge University Press, vol. 59(04), pages 1043-1062, December.
  11. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2007. "Enhanced routines for instrumental variables/GMM estimation and testing," CERT Discussion Papers 0706, Centre for Economic Reform and Transformation, Heriot Watt University.
  12. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-48, June.
  13. Keith Head & John Ries, 1998. "Immigration and Trade Creation: Econometric Evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 47-62, February.
  14. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-46, December.
  15. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," North American Stata Users' Group Meetings 2003 05, Stata Users Group.
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Cited by:
  1. Max Nathan, 2014. "The wider economic impacts of high-skilled migrants: a survey of the literature for receiving countries," IZA Journal of Migration, Springer, vol. 3(1), pages 1-20, December.
  2. Nathan, Max, 2013. "The Wider Economic Impacts of High-Skilled Migrants: A Survey of the Literature," IZA Discussion Papers 7653, Institute for the Study of Labor (IZA).

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