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The EFFects of Immigration on the Scale and Composition of Demand: A study of California establishments

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  • Francesca Mazzolari

    () (Department of Economics of the University of California, Irvine)

  • David Numark

    () (Department of Economics of the University of California, Irvine)

Abstract

We study potential economic benefits of immigration stemming from two factors: first, that immigrants bring not only their labor supply with them, but also their consumption demands; and second, that immigrants may have a comparative advantage in the production of ethnic goods. Using data on the universe of business establishments located in California between 1992 and 2002 matched with Census of Population data, we find some evidence that immigrant inflows boost employment in the retail sector, which is non-traded and a non-intensive user of immigrant labor. We find that immigration is associated with fewer stand-alone retail stores, and a greater number of large and in particular big-box retailers – evidence that likely contradicts a diversityenhancing effect of immigration. On the other hand, focusing more sharply on the restaurant sector, for which we can better identify the types of products consumed by customers, the evidence indicates that immigration is associated with increased ethnic diversity of restaurants.

Suggested Citation

  • Francesca Mazzolari & David Numark, 2009. "The EFFects of Immigration on the Scale and Composition of Demand: A study of California establishments," Human Development Research Papers (2009 to present) HDRP-2009-33, Human Development Report Office (HDRO), United Nations Development Programme (UNDP), revised Aug 2009.
  • Handle: RePEc:hdr:papers:hdrp-2009-33
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    File URL: http://hdr.undp.org/en/reports/global/hdr2009/papers/HDRP_2009_33.pdf
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    References listed on IDEAS

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    1. Gary S. Becker & Tomas J. Philipson & Rodrigo R. Soares, 2005. "The Quantity and Quality of Life and the Evolution of World Inequality," American Economic Review, American Economic Association, vol. 95(1), pages 277-291, March.
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    More about this item

    Keywords

    Effects of immigration; ethnic goods; consumption diversitY;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • J0 - Labor and Demographic Economics - - General
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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