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Immigration and Trade Creation for the U.S.: The Role of Immigrant Occupation

  • Mundra, Kusum

    ()

    (Rutgers University)

This paper highlights that the immigrants' effect on trade is not identical across all types of immigrants but it varies with the immigrants' occupation. Using a sample of 63 U.S. trading partners which are also big immigrant sending countries over the years 1991-2000, this paper finds that the immigrant trade elasticity for the no occupation group is similar in magnitude to the immigrant effect on trade estimated in the literature. However, this does not capture the full extent of the effect of immigrant network on trade. The share of professional immigrants in comparison to immigrants with no occupation significantly increases the trade elasticity for Rauch's referenced price and differentiated commodities and this effect is strongest for the differentiated goods. This paper establishes that immigrants' occupation is an important indicator of the quality and effectiveness of immigrants' network in trade creation with the home country.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7073.

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Length: 30 pages
Date of creation: Dec 2012
Date of revision:
Handle: RePEc:iza:izadps:dp7073
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  1. Orrenius, Pia M. & Zavodny, Madeline, 2006. "Does Immigration Affect Wages? A Look at Occupation-Level Evidence," IZA Discussion Papers 2481, Institute for the Study of Labor (IZA).
  2. Mayer, Thierry & Pierre-Phillippe Combes & Miren Lafourcade, 2003. "Can Business and Social Networks Explain the Border Effect Puzzle?," Royal Economic Society Annual Conference 2003 150, Royal Economic Society.
  3. Subhayu Bandyopadhyay & Cletus C. Coughlin & Howard J. Wall, 2007. "Ethnic networks and U.S. exports," Working Papers 2005-069, Federal Reserve Bank of St. Louis.
  4. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," United Kingdom Stata Users' Group Meetings 2003 02, Stata Users Group.
  5. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-46, December.
  6. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2007. "Enhanced routines for instrumental variables/GMM estimation and testing," Boston College Working Papers in Economics 667, Boston College Department of Economics, revised 05 Sep 2007.
  7. Keith Head & John Ries, 1998. "Immigration and Trade Creation: Econometric Evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 47-62, February.
  8. Casella, Alessandra & Rauch, James E, 1998. "Overcoming Informational Barriers to International Resource Allocation: Prices and Group Ties," CEPR Discussion Papers 1978, C.E.P.R. Discussion Papers.
  9. Gould, David M, 1994. "Immigrant Links to the Home Country: Empirical Implications for U.S. Bilateral Trade Flows," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 302-16, May.
  10. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
  11. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November.
  12. Wagner, Don & Head, Keith & Ries, John, 2002. "Immigration and the Trade of Provinces," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(5), pages 507-25, December.
  13. Dunlevy, James A. & Hutchinson, William K., 1999. "The Impact of Immigration on American Import Trade in the Late Nineteenth and Early Twentieth Centuries," The Journal of Economic History, Cambridge University Press, vol. 59(04), pages 1043-1062, December.
  14. Robert C. Feenstra & Robert E. Lipsey & Haiyan Deng & Alyson C. Ma & Hengyong Mo, 2005. "World Trade Flows: 1962-2000," NBER Working Papers 11040, National Bureau of Economic Research, Inc.
  15. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-48, June.
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