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Immigration and Location Choices of Native-Born Workers in Canada

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  • Aydede, Yigit
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    Abstract

    There are two competing views on how immigration would affect local labor markets. When immigrants offer skills similar to those of native-born workers, they may compete directly with them, and this competition may lead to lower economic returns for native-born workers. This view can be called the “substitution†hypothesis. The alternative view is that immigrants may provide “complementary†skills, which can raise the productivity of other workers. If the substitution argument is effective, immigration might lead to out-migration of the nonimmigrant population from a community in the short run. Models in location-choice studies usually examine the migration decision in two separate processes: whether-to and where-to decisions about moving. The present study investigates how location choices of native-born workers can be influenced by the conditions in both the potential destinations and the departure regions. To validate either the substitution or complementary view, we apply choice-specific, clustered fixed-effect response models, which use industry- and occupation-specific regional attributes that allow us to control for unobserved regional heterogeneity as well as to identify regional factors that affect location choices. This study uses the 20 percent sample of the 2006 Census that covers the entire country with 282 census divisions. The results show that location-choice models are sensitive to how regional attributes are defined. When industry-specific immigration density differentials across regions are measured only at destinations, they have strong and negative effects on the location choices of the native born. However, when the models control choice-specific attributes relative to the origin, immigration variables become insignificant on the desirability of destinations.

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    File URL: http://www.clsrn.econ.ubc.ca/workingpapers/CLSRN%20Working%20Paper%20no.%20130%20-%20Aydede.pdf
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    Bibliographic Info

    Paper provided by Vancouver School of Economics in its series CLSSRN working papers with number clsrn_admin-2014-12.

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    Length: 37 pages
    Date of creation: 26 Mar 2014
    Date of revision: 26 Mar 2014
    Handle: RePEc:ubc:clssrn:clsrn_admin-2014-12

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    Web page: http://www.clsrn.econ.ubc.ca/

    Related research

    Keywords: Immigration; Migration; Crowding Out; Displacement; Mobility;

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    References

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    1. George J. Borjas, 2006. "Native Internal Migration and the Labor Market Impact of Immigration," Journal of Human Resources, University of Wisconsin Press, vol. 41(2).
    2. John DiNardo & David Card, 2000. "Do Immigrant Inflows Lead to Native Outflows?," American Economic Review, American Economic Association, vol. 90(2), pages 360-367, May.
    3. George J. Borjas & Richard B. Friedman & Lawrence F. Katz, 1997. "How Much Do Immigration and Trade Affect Labor Market Outcomes?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1), pages 1-90.
    4. S. Longhi & P. Nijkamp & J. Poot, 2008. "Meta-Analysis of Empirical Evidence on the Labour Market Impacts of Immigration," Population Studies Centre Discussion Papers dp-67, University of Waikato, Population Studies Centre.
    5. Jackman, Richard & Savouri, Savvas, 1992. "Regional Migration in Britain: An Analysis of Gross Flows Using NHS Central Register Data," Economic Journal, Royal Economic Society, vol. 102(415), pages 1433-50, November.
    6. Ather H. Akbari & Yigit Aydede, 2012. "Effects of immigration on house prices in Canada," Applied Economics, Taylor & Francis Journals, vol. 44(13), pages 1645-1658, May.
    7. Randall Filer, 1992. "The Effect of Immigrant Arrivals on Migratory Patterns of Native Workers," NBER Chapters, in: Immigration and the Workforce: Economic Consequences for the United States and Source Areas, pages 245-270 National Bureau of Economic Research, Inc.
    8. Abdurrahman Aydemir & George J. Borjas, 2007. "Cross-Country Variation in the Impact of International Migration: Canada, Mexico, and the United States," Journal of the European Economic Association, MIT Press, vol. 5(4), pages 663-708, 06.
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