IDEAS home Printed from https://ideas.repec.org/p/cir/cirwor/2026s-01.html

When Neighbors Stop Knocking: The Impact of Canada’s 2025 Tourism Decline on U.S. Local Labor Markets

Author

Listed:
  • André Kurmann
  • Étienne Lalé
  • Julien Martin

Abstract

This article provides the first systematic assessment of the labor market effects of a 25% decline in travel by Canadians to the United States in 2025. We combine mobile phone data measuring the presence of Canadian visitors at the zip code × industry level with real-time employment data at the establishment level. Using a difference-in-differences approach, we estimate that establishments in the most exposed markets experienced employment declines of about 6%, implying a loss of between 13,900 and 42,100 jobs in the United States. These effects are spatially concentrated and should be interpreted as lower bounds, as our analysis is limited to small and medium-sized enterprises and does not account for spillover effects. Cet article fournit la première évaluation systématique des effets sur le marché du travail de la diminution de 25 % des voyages de Canadiens vers les États-Unis en 2025. Nous combinons des données de téléphonie mobile mesurant la présence de visiteurs canadiens au niveau code postal × industrie avec des données d’emploi en temps réel au niveau des établissements. À l’aide d’une approche en différences-en-différences, nous estimons que les établissements situés dans les marchés les plus exposés ont connu des baisses d’emploi d’environ 6 %, ce qui implique une perte comprise entre 13 900 et 42 100 emplois aux États-Unis. Ces effets sont concentrés spatialement et doivent être interprétés comme des bornes inférieures puisque notre analyse se limite aux petites et moyennes entreprises et fait abstraction des effets de débordement.

Suggested Citation

  • André Kurmann & Étienne Lalé & Julien Martin, 2026. "When Neighbors Stop Knocking: The Impact of Canada’s 2025 Tourism Decline on U.S. Local Labor Markets," CIRANO Working Papers 2026s-01, CIRANO.
    • Handle: RePEc:cir:cirwor:2026s-01
    as

    Download full text from publisher

    File URL: https://cirano.qc.ca/files/publications/2026s-01.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ignatenko, Anna & Lashkaripour, Ahmad & Macedoni, Luca & Simonovska, Ina, 2025. "Making America great again? The economic impacts of Liberation Day tariffs," Journal of International Economics, Elsevier, vol. 157(C).
    2. Yuhei Miyauchi & Kentaro Nakajima & Stephen J Redding, 2025. "The Economics of Spatial Mobility: Theory and Evidence Using Smartphone Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 140(4), pages 2507-2570.
    3. Milena Almagro & Tomás Domínguez‐Iino, 2025. "Location Sorting and Endogenous Amenities: Evidence From Amsterdam," Econometrica, Econometric Society, vol. 93(3), pages 1031-1071, May.
    4. Ahn, JaeBin & Greaney, Theresa M. & Kiyota, Kozo, 2022. "Political conflict and angry consumers: Evaluating the regional impacts of a consumer boycott on travel services trade," Journal of the Japanese and International Economies, Elsevier, vol. 65(C).
    5. Sofronis Clerides & Peter Davis & Antonis Michis, 2015. "National Sentiment and Consumer Choice: The Iraq War and Sales of US Products in Arab Countries," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(3), pages 829-851, July.
    6. Hidalgo, Alberto, 2024. "Your room is ready: Tourism and urban revival," Regional Science and Urban Economics, Elsevier, vol. 109(C).
    7. Kurmann, André & Lalé, Etienne & Ta, Lien, 2025. "Measuring small business dynamics and employment with private-sector real-time data," Journal of Public Economics, Elsevier, vol. 250(C).
    8. Austan Goolsbee & Chad Syverson & Rebecca Goldgof & Joe Tatarka, 2025. "The Curious Surge of Productivity in U.S. Restaurants," NBER Working Papers 33555, National Bureau of Economic Research, Inc.
    9. Amit K. Khandelwal & Pablo D. Fajgelbaum, 2022. "The Economic Impacts of the US–China Trade War," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 205-228, August.
    10. Alberto Hidalgo, 2024. "Your Room is Ready: Tourism and Urban Revival," Studies on the Spanish Economy eee2024-03, FEDEA.
    11. Andrés Rodríguez-Clare & Mauricio Ulate & Jose P. Vasquez, 2025. "The 2025 Trade War: Dynamic Impacts Across U.S. States and the Global Economy," NBER Working Papers 33792, National Bureau of Economic Research, Inc.
    12. Victor Couture & Jonathan I. Dingel & Allison Green & Jessie Handbury & Kevin R. Williams, 2020. "Measuring Movement and Social Contact with Smartphone Data: A Real-time Application to COVID-19," Cowles Foundation Discussion Papers 2241, Cowles Foundation for Research in Economics, Yale University.
    13. Benjamin Faber & Cecile Gaubert, 2019. "Tourism and Economic Development: Evidence from Mexico's Coastline," American Economic Review, American Economic Association, vol. 109(6), pages 2245-2293, June.
    14. Heilmann, Kilian, 2016. "Does political conflict hurt trade? Evidence from consumer boycotts," Journal of International Economics, Elsevier, vol. 99(C), pages 179-191.
    15. Larry Chavis & Phillip Leslie, 2009. "Consumer boycotts: The impact of the Iraq war on French wine sales in the U.S," Quantitative Marketing and Economics (QME), Springer, vol. 7(1), pages 37-67, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shi, Wei & Wei, Jingran, 2023. "In the crossfire: Multinational companies and consumer boycotts," China Economic Review, Elsevier, vol. 77(C).
    2. Ahn, JaeBin & Greaney, Theresa M. & Kiyota, Kozo, 2022. "Political conflict and angry consumers: Evaluating the regional impacts of a consumer boycott on travel services trade," Journal of the Japanese and International Economies, Elsevier, vol. 65(C).
    3. Taralashvili, Tamar, 2024. "How interstate soft conflicts affect bilateral migration: Results from a structural gravity model," International Economics, Elsevier, vol. 179(C).
    4. Alexis Antoniades & Sofronis Clerides & Mingzhi Xu, 2023. "Micro‐responses to shocks: pricing, promotion, and entry," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(3), pages 584-615, July.
    5. In Kyung Kim & Kyoo il Kim, 2022. "No Beer No Friends: Quantifying the Effect of the Beer Boycott," Journal of Industrial Economics, Wiley Blackwell, vol. 70(3), pages 711-751, September.
    6. Zijun Luo & Yonghong Zhou, 2020. "Decomposing the effects of consumer boycotts: evidence from the anti-Japanese demonstration in China," Empirical Economics, Springer, vol. 58(6), pages 2615-2634, June.
    7. Gustavo de Souza & Haishi Li & Ziho Park & Yulin Wang, 2025. "Trade Policy Uncertainty and Supply Chain Disruptions: Firm-Level Evidence from "Liberation Day"," CESifo Working Paper Series 12285, CESifo.
    8. Pablo A. Peña & Saidé Salazar & Carlos Serrano, 2022. "Trump’s wall and gourmet coffee sales: The effect of a consumer boycott in Mexico," Economics and Politics, Wiley Blackwell, vol. 34(1), pages 113-141, March.
    9. Felbermayr, Gabriel & Hinz, Julian & Krantz, Sebastian & Mahlkow, Hendrik & Wanner, Joschka, 2025. "Tariffs hit differently: The regional impact of US tariffs across Europe and the role of the single market," Kiel Working Papers 2309, Kiel Institute for the World Economy.
    10. Cuadras-Morató Xavier & Raya Josep Maria, 2016. "Boycott or Buycott?: Internal Politics and Consumer Choices," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(1), pages 185-218, January.
    11. Igal Hendel & Saul Lach & Yossi Spiegel, 2017. "Consumers' activism: the cottage cheese boycott," RAND Journal of Economics, RAND Corporation, vol. 48(4), pages 972-1003, December.
    12. Yan Ren & Caixia Zong & Xiaoling Zhan, 2024. "Trade war, national sentiment and consumption substitution of cultural products: evidence from China’s film market," Empirical Economics, Springer, vol. 66(2), pages 503-538, February.
    13. Anna Miromanova, 2023. "The effectiveness of embargoes: Evidence from Russia," The World Economy, Wiley Blackwell, vol. 46(4), pages 906-940, April.
    14. Yan, Jiaqiang & Zhou, Yonghong, 2021. "Economic return to political support: Evidence from voting on the representation of China in the United Nations," Journal of Asian Economics, Elsevier, vol. 75(C).
    15. Zijun Luo & Yonghong Zhou, 2016. "Gainers and Losers of Political Instability: Evidence from the Anti-Japanese Demonstration in China," Working Papers 1608, Sam Houston State University, Department of Economics and International Business.
    16. Eduardo Dávila & Andrés Rodríguez-Clare & Andreas Schaab & Stacy Tan, 2025. "A Dynamic Theory of Optimal Tariffs," NBER Working Papers 33898, National Bureau of Economic Research, Inc.
    17. Kapar, Burcu & Buigut, Steven & Billah, Syed Mabruk, 2025. "The short-term reaction of financial markets to the U.S. trade tariff announcement," Finance Research Letters, Elsevier, vol. 86(PB).
    18. In Kyung Kim, 2023. "Country Image and Consumer Choice: The Case of the Beer Market during the COVID‐19 Pandemic," Journal of Industrial Economics, Wiley Blackwell, vol. 71(4), pages 1090-1120, December.
    19. Yuping Deng & Haicheng Wang & Yanrui Wu, 2024. "Public Opinion and Chinese Exports: Evidence from Twitter Sentiment Analysis," Economics Discussion / Working Papers 24-03, The University of Western Australia, Department of Economics.
    20. Hayiel Hino & Israel D. Nebenzahl, 2021. "Applying information integration theory to the study of boycott–spillover to linked regions," Quality & Quantity: International Journal of Methodology, Springer, vol. 55(5), pages 1889-1915, October.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cir:cirwor:2026s-01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Webmaster (email available below). General contact details of provider: https://edirc.repec.org/data/ciranca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.