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The Short-and Long-Run Determinants of Unskilled Immigration into US States

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Abstract

This paper uses a gravity model of migration to analyze how income differentials affect the flow of immigrants into U.S. states. We add to existing literature by decomposing income differentials into short- and long-term components and by focusing on newly arrived unskilled immigrants between 2000-2008. Our sample is unique in that 95 percent of our observed immigrant flows equal zero. The trade literature has advocated using the Eaton and Tamura (1994) threshold Tobit model in similar settings, and we are the first to apply the methodology to analyze the determinants of immigration. We find that recent U.S. immigrants positively respond to differences in long-term (or trend) GDP between origin countries and U.S. states. When appropriately accounting for the zero values, we also find that differences in GDP fluctuations significantly affect the flow of unskilled immigrants. In addition, we find that short-run GDP fluctuations pull unskilled immigrants into certain U.S. states, whereas GDP levels push unskilled immigrants out of their countries of origin.

Suggested Citation

  • Simpson, Nicole & Sparber, Chad, 2010. "The Short-and Long-Run Determinants of Unskilled Immigration into US States," Working Papers 2010-06, Department of Economics, Colgate University.
  • Handle: RePEc:cgt:wpaper:2010-06
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    File URL: http://commons.colgate.edu/cgi/viewcontent.cgi?article=1012&context=econ_facschol
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    References listed on IDEAS

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    1. Adriana Kugler & Mutlu Yuksel, 2008. "Effects of Low-Skilled Immigration on U.S. Natives: Evidence from Hurricane Mitch," NBER Working Papers 14293, National Bureau of Economic Research, Inc.
    2. Timothy J. Hatton & Jeffrey G. Williamson, 2002. "What Fundamentals Drive World Migration?," NBER Working Papers 9159, National Bureau of Economic Research, Inc.
    3. Warin Thierry & Svaton Pavel, 2008. "European Migration: Welfare Migration or Economic Migration?," Global Economy Journal, De Gruyter, vol. 8(3), pages 1-32, September.
    4. Lewer, Joshua J. & Van den Berg, Hendrik, 2008. "A gravity model of immigration," Economics Letters, Elsevier, vol. 99(1), pages 164-167, April.
    5. Mandelman, Federico S. & Zlate, Andrei, 2012. "Immigration, remittances and business cycles," Journal of Monetary Economics, Elsevier, vol. 59(2), pages 196-213.
    6. Borjas, George J, 1999. "Immigration and Welfare Magnets," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 607-637, October.
    7. George J. Borjas, 2001. "Does Immigration Grease the Wheels of the Labor Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(1), pages 69-134.
    8. Gail Pacheco & Stephanie Rossouw & Joshua Lewer, 2013. "Do Non-Economic Quality of Life Factors Drive Immigration?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 110(1), pages 1-15, January.
    9. David Karemera & Victor Iwuagwu Oguledo & Bobby Davis, 2000. "A gravity model analysis of international migration to North America," Applied Economics, Taylor & Francis Journals, vol. 32(13), pages 1745-1755.
    10. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
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    Cited by:

    1. Alícia Adserà & Mariola Pytliková, 2015. "The Role of Language in Shaping International Migration," Economic Journal, Royal Economic Society, vol. 125(586), pages 49-81, August.
    2. Bertoli, Simone & Fernández-Huertas Moraga, Jesús, 2013. "Multilateral resistance to migration," Journal of Development Economics, Elsevier, vol. 102(C), pages 79-100.
    3. Simone Bertoli & Jesus Fernández-Huertas Moraga, 2012. "Visa Policies, Networks and the Cliff at the Border," Working Papers 2012-12, FEDEA.
    4. Nicole B. Simpson, 2013. "Happiness and migration," Chapters,in: International Handbook on the Economics of Migration, chapter 21, pages 393-408 Edward Elgar Publishing.

    More about this item

    Keywords

    immigration; macroeconomics; GDP; gravity;

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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