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The Effects of Immigration on the Scale and Composition of Demand: A study of California establishments

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  • Mazzolari, Francesca
  • Numark, David
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    Abstract

    We study potential economic benefits of immigration stemming from two factors: first, that immigrants bring not only their labor supply with them, but also their consumption demands; and second, that immigrants may have a comparative advantage in the production of ethnic goods. Using data on the universe of business establishments located in California between 1992 and 2002 matched with Census of Population data, we find some evidence that immigrant inflows boost employment in the retail sector, which is non-traded and a non-intensive user of immigrant labor. We find that immigration is associated with fewer stand-alone retail stores, and a greater number of large and in particular big-box retailers – evidence that likely contradicts a diversityenhancing effect of immigration. On the other hand, focusing more sharply on the restaurant sector, for which we can better identify the types of products consumed by customers, the evidence indicates that immigration is associated with increased ethnic diversity of restaurants.

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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 19217.

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    Date of creation: 01 Aug 2009
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    Handle: RePEc:pra:mprapa:19217

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    Keywords: Effects of immigration; ethnic goods; consumption diversity;

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    9. Bodvarsson, Örn B. & Lewer, Joshua J. & Van den Berg, Hendrik, 2007. "Measuring Immigration's Effects on Labor Demand: A Reexamination of the Mariel Boatlift," IZA Discussion Papers 2919, Institute for the Study of Labor (IZA).
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    22. Jed Kolko & David Neumark, 2008. "Changes In The Location Of Employment And Ownership: Evidence From California," Journal of Regional Science, Wiley Blackwell, vol. 48(4), pages 717-744.
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