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Immigration, local crowd-out and undercoverage bias

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  • Michael Amior

Abstract

Using decadal census data since 1960, I cannot reject the hypothesis that new immigrants crowd out existing residents from US commuting zones and states one-for-one. My estimate accounts explicitly for dynamic local adjustment, it is statistically precise and robust to numerous specifications, and I show how it can be reconciled with apparently conflicting results in the literature. Exploiting my model's structure, I attribute 30% of the observed effect to mismeasurement, specifically undercoverage of new immigrants in the census. Based on a remarkably simple decomposition (and after adjusting for undercoverage), I show that population mobility accounts for 90% of local labor market adjustment (following an immigration shock), and labor demand the remainder. These results have important methodological implications for the estimation of immigration effects.

Suggested Citation

  • Michael Amior, 2020. "Immigration, local crowd-out and undercoverage bias," CEP Discussion Papers dp1669, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp1669
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    References listed on IDEAS

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    1. Sanderson, Eleanor & Windmeijer, Frank, 2016. "A weak instrument F-test in linear IV models with multiple endogenous variables," Journal of Econometrics, Elsevier, vol. 190(2), pages 212-221.
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    3. Richard A. Wright & Mark Ellis & Michael Reibel, 1997. "The Linkage between Immigration and Internal Migration in Large Metropolitan Areas in the United States," Economic Geography, Taylor & Francis Journals, vol. 73(2), pages 234-254, April.
    4. Abowd, John M. & Freeman, Richard B. (ed.), 1991. "Immigration, Trade, and the Labor Market," National Bureau of Economic Research Books, University of Chicago Press, number 9780226000954, March.
    5. David Albouy, 2008. "Are Big Cities Bad Places to Live? Estimating Quality of Life across Metropolitan Areas," NBER Working Papers 14472, National Bureau of Economic Research, Inc.
    6. Abdurrahman Aydemir & George J. Borjas, 2011. "Attenuation Bias in Measuring the Wage Impact of Immigration," Journal of Labor Economics, University of Chicago Press, vol. 29(1), pages 69-113, January.
    7. 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.
    8. Peri, Giovanni & Sparber, Chad, 2011. "Assessing inherent model bias: An application to native displacement in response to immigration," Journal of Urban Economics, Elsevier, vol. 69(1), pages 82-91, January.
    9. Suphanit Piyapromdee, 2017. "The Impact of Immigration on Wages, Internal Migration and Welfare," PIER Discussion Papers 69, Puey Ungphakorn Institute for Economic Research, revised Sep 2017.
    10. Christian Dustmann & Albrecht Glitz, 2015. "How Do Industries and Firms Respond to Changes in Local Labor Supply?," Journal of Labor Economics, University of Chicago Press, vol. 33(3), pages 711-750.
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    12. Gihoon Hong & John McLaren, 2015. "Are Immigrants a Shot in the Arm for the Local Economy?," NBER Working Papers 21123, National Bureau of Economic Research, Inc.
    13. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade, and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1, June.
    14. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1335-1374.
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    More about this item

    Keywords

    immigration; geographical mobility; local labor markets; employment;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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