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Immigrants Equilibrate Local Labor Markets: Evidence from the Great Recession

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  • Brian C. Cadena
  • Brian K. Kovak

Abstract

This paper demonstrates that low-skilled Mexican-born immigrants' location choices respond strongly to changes in local labor demand, which helps equalize spatial differences in employment outcomes for low-skilled native workers. We leverage the substantial geographic variation in labor demand during the Great Recession to identify migration responses to local shocks and find that low-skilled Mexican-born immigrants respond much more strongly than low-skilled natives. Further, Mexican mobility reduced the incidence of local demand shocks on natives, such that those living in metro areas with a substantial Mexican-born population experienced a roughly 50 percent weaker relationship between local shocks and local employment probabilities. (JEL E32, J15, J23, J24, J61, R23)

Suggested Citation

  • Brian C. Cadena & Brian K. Kovak, 2016. "Immigrants Equilibrate Local Labor Markets: Evidence from the Great Recession," American Economic Journal: Applied Economics, American Economic Association, vol. 8(1), pages 257-290, January.
    • Handle: RePEc:aea:aejapp:v:8:y:2016:i:1:p:257-90
    Note: DOI: 10.1257/app.20140095
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    References listed on IDEAS

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    1. Konstantinos Tatsiramos, 2009. "Geographic labour mobility and unemployment insurance in Europe," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(2), pages 267-283, April.
    2. Antonio Spilimbergo & Gordon H. Hanson, 1999. "Illegal Immigration, Border Enforcement, and Relative Wages: Evidence from Apprehensions at the U.S.-Mexico Border," American Economic Review, American Economic Association, vol. 89(5), pages 1337-1357, December.
    3. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
    4. Brian C. Cadena, 2013. "Native Competition and Low-Skilled Immigrant Inflows," Journal of Human Resources, University of Wisconsin Press, vol. 48(4), pages 910-944.
    5. David Mare & Melanie Morten & Steven Stillman, 2007. "Settlement patterns and the geographic mobility of recent migrants to New Zealand," New Zealand Economic Papers, Taylor & Francis Journals, vol. 41(2), pages 163-195.
    6. repec:oup:qjecon:v:129:y:2013:i:1:p:1-59 is not listed on IDEAS
    7. Jesse Rothstein, 2012. "The Labor Market Four Years into the Crisis: Assessing Structural Explanations," ILR Review, Cornell University, ILR School, vol. 65(3), pages 467-500, July.
    8. Rebecca Diamond, 2016. "The Determinants and Welfare Implications of US Workers' Diverging Location Choices by Skill: 1980-2000," American Economic Review, American Economic Association, vol. 106(3), pages 479-524, March.
    9. Petri Böckerman & Mika Haapanen, 2013. "The effect of polytechnic reform on migration," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(2), pages 593-617, April.
    10. Kerwin Kofi Charles & Erik Hurst & Matthew J. Notowidigdo, 2013. "Housing Booms, Manufacturing Decline, and Labor Market Outcomes," NBER Working Papers 18949, National Bureau of Economic Research, Inc.
    11. Pia M. Orrenius & Madeline Zavodny, 2010. "Mexican Immigrant Employment Outcomes over the Business Cycle," American Economic Review, American Economic Association, vol. 100(2), pages 316-320, May.
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    More about this item

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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