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

  • Mazzolari, Francesca
  • Numark, David
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    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.

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    File URL: http://mpra.ub.uni-muenchen.de/19217/1/MPRA_paper_19217.pdf
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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 19217.

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    Date of creation: 01 Aug 2009
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    Handle: RePEc:pra:mprapa:19217
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    1. George J. Borjas, 2009. "The Analytics of the Wage Effect of Immigration," NBER Working Papers 14796, National Bureau of Economic Research, Inc.
    2. Christian Broda & David Weinstein, 2004. "Globalization and the gains from variety," Staff Reports 180, Federal Reserve Bank of New York.
    3. George J. Borjas & Richard B. Friedman & Lawrence F. Katz, 1997. "How Much Do Immigration and Trade Affect Labor Market Outcomes?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1), pages 1-90.
    4. Bodvarsson, Örn B. & Van den Berg, Hendrik F. & Lewer, Joshua J., 2008. "Measuring immigration's effects on labor demand: A reexamination of the Mariel Boatlift," Labour Economics, Elsevier, vol. 15(4), pages 560-574, August.
    5. Ethan Lewis, 2005. "Immigration, Skill Mix, and the Choice of Technique," Working Papers 05-04, Center for Economic Studies, U.S. Census Bureau.
    6. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
    7. Joseph G. Altonji & David Card, 1991. "The Effects of Immigration on the Labor Market Outcomes of Less-skilled Natives," NBER Chapters, in: Immigration, Trade, and the Labor Market, pages 201-234 National Bureau of Economic Research, Inc.
    8. David Neumark & Junfu Zhang & Brandon Wall, 2005. "Employment Dynamics and Business Relocation: New Evidence from the National Establishment Time Series," PPIC Working Papers 2005.11, Public Policy Institute of California.
    9. David Card, 1989. "The Impact of the Mariel Boatlift on the Miami Labor Market," NBER Working Papers 3069, National Bureau of Economic Research, Inc.
    10. Gianmarco I.P. Ottaviano & Giovanni Peri, 2007. "The Effects of Immigration on U.S. Wages and Rents: A General Equilibrium Approach," CReAM Discussion Paper Series 0713, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    11. Patricia Cortes, 2008. "The Effect of Low-Skilled Immigration on U.S. Prices: Evidence from CPI Data," Journal of Political Economy, University of Chicago Press, vol. 116(3), pages 381-422, 06.
    12. George J. Borjas & Jeffrey Grogger & Gordon H. Hanson, 2008. "Imperfect Substitution between Immigrants and Natives: A Reappraisal," NBER Working Papers 13887, National Bureau of Economic Research, Inc.
    13. Feenstra, Robert C, 1994. "New Product Varieties and the Measurement of International Prices," American Economic Review, American Economic Association, vol. 84(1), pages 157-77, March.
    14. Gianmarco I.P. Ottaviano & Giovanni Peri, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," NBER Working Papers 14188, National Bureau of Economic Research, Inc.
    15. John DiNardo & David Card, 2000. "Do Immigrant Inflows Lead to Native Outflows?," American Economic Review, American Economic Association, vol. 90(2), pages 360-367, May.
    16. J. Bradford Jensen & Lori G. Kletzer, 2010. "Measuring Tradable Services and the Task Content of Offshorable Services Jobs," NBER Chapters, in: Labor in the New Economy, pages 309-335 National Bureau of Economic Research, Inc.
    17. Lach, Saul, 2005. "Immigration and Prices," CEPR Discussion Papers 5083, C.E.P.R. Discussion Papers.
    18. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade, and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1, August.
    19. Ottaviano, Gianmarco I. P. & Peri, Giovanni, 2007. "Rethinking the effects of immigration on wages," HWWI Research Papers 3-8, Hamburg Institute of International Economics (HWWI).
    20. Jed Kolko & David Neumark, 2009. "Do Some Enterprise Zones Create Jobs?," NBER Working Papers 15206, National Bureau of Economic Research, Inc.
    21. Jed Kolko & David Neumark, 2008. "Changes In The Location Of Employment And Ownership: Evidence From California," Journal of Regional Science, Wiley Blackwell, vol. 48(4), pages 717-744.
    22. Waldfogel, Joel, 2008. "The median voter and the median consumer: Local private goods and population composition," Journal of Urban Economics, Elsevier, vol. 63(2), pages 567-582, March.
    23. Katharine G. Abraham & James R. Spletzer & Michael Harper, 2010. "Labor in the New Economy," NBER Books, National Bureau of Economic Research, Inc, number abra08-1, August.
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