IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp18626.html

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

Author

Listed:
  • Kurmann, André

    (Drexel University)

  • Lalé, Etienne

    (York University, Canada)

  • Martin, Julien

    (Université du Québec à Montréal, CEPR, and CIRANO)

Abstract

We provide the first systematic evidence on the short-run labor market consequences of the 25% decline in Canadian visits to the United States in 2025. We combine smartphone foot-traffic data measuring Canadian visitor presence at the ZIP code x industry level with real-time establishment-level employment records. Exploiting the high heterogeneity in exposure to Canadian visits, we find that small establishments in the top 1% exposed local-industry markets experienced employment declines of about 6% compared to less exposed ones. Our estimates imply between 13,900 and 42,100 jobs lost, concentrated in a small number of localities.

Suggested Citation

  • Kurmann, André & Lalé, Etienne & Martin, Julien, 2026. "When Neighbors Stop Knocking: The Impact of Canada's 2025 Tourism Decline on U.S. Local Labor Markets," IZA Discussion Papers 18626, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp18626
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp18626.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 Dingel & Allison Green & Jessie Handbury & Kevin Williams, 2020. "Measuring Movement and Social Contact with Smartphone Data: A Real-Time Application to COVID-19," Opportunity and Inclusive Growth Institute Working Papers 35, Federal Reserve Bank of Minneapolis.
    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. H. Holly Wang & Na Hao & Xinxin Wang & Dongwhoi Moon, 2025. "A three‐country study on consumer responses to political conflicts: Boycott, buycott, or standby," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 47(4), pages 1433-1468, September.
    10. 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.
    11. Anna Miromanova, 2023. "Quantifying the trade‐reducing effect of embargoes: Firm‐level evidence from Russia," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(3), pages 1121-1160, August.
    12. Pao-Li Chang & Tomoki Fujii & Wei Jin, 2022. "Good Names Beget Favors: The Impact of Country Image on Trade Flows and Welfare," Management Science, INFORMS, vol. 68(10), pages 7555-7596, October.
    13. 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.
    14. Yuping Deng & Haicheng Wang & Yanrui Wu, 2026. "Public opinion and Chinese exports: evidence from Twitter sentiment analysis," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 31(1), pages 1-30, January.
    15. Tanaka, Ayumu & Ito, Banri & Wakasugi, Ryuhei, 2019. "How do exporters respond to exogenous shocks: Evidence from Japanese firm-level data," Japan and the World Economy, Elsevier, vol. 51(C), pages 1-1.
    16. 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.
    17. Páscoa, Jorge & Peralta, Susana & Pereira dos Santos, João, 2026. "Touristification and the Unequal Incidence of Housing Shocks: Evidence from Tax Records," IZA Discussion Papers 18666, IZA Network @ LISER.
    18. 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.
    19. 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.
    20. Anna Miromanova, 2023. "The effectiveness of embargoes: Evidence from Russia," The World Economy, Wiley Blackwell, vol. 46(4), pages 906-940, April.

    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:iza:izadps:dp18626. 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: Mark Fallak (email available below). General contact details of provider: https://edirc.repec.org/data/izaaalu.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.