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Immigration's Role in Regional Adjustment: City Level Evidence of Spatial Arbitrage

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  • Michael I. Cragg
  • Matthew E. Kahn

Abstract

This paper uses 1990 Micro Census Data to study city-to-city migration as a function of crosssectional differentials in economic opportunity. We test whether people move from low economic opportunity areas; and, people move to high economic opportunity areas. We test hypotheses concerning which demographic groups arbitrage cross-city differences, whether gross migration and net migration flows yield the same inferences concerning arbitrage and test whether immigrants arbitrage cross-sectional differentials like U.S. natives. For college educated men ages 22-25, we estimate a net-migration elasticity of 2.85 with respect to metropolitan net income.

Suggested Citation

  • Michael I. Cragg & Matthew E. Kahn, 1998. "Immigration's Role in Regional Adjustment: City Level Evidence of Spatial Arbitrage," Harvard Institute of Economic Research Working Papers 1821, Harvard - Institute of Economic Research.
  • Handle: RePEc:fth:harver:1821
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