Immigration and Business Dynamics: Evidence from U.S. Firms

Parag Mahajan

No 9874, CESifo Working Paper Series from CESifo

Abstract: Prior literature on the economic impact of immigration has largely ignored changes to the composition of labor demand. In contrast, this paper uses a comprehensive collection of survey and administrative data to show that heterogeneous establishment entry and exit drive immigrant-induced job creation and a rightward shift of the productivity distribution in U.S. local industries. High-productivity establishments are more likely to enter and less likely to exit in high immigration environments, whereas low-productivity establishments are more likely to exit. These dynamics result in productivity growth. A general equilibrium model proposes a mechanism that ties immigrant workers to high-productivity firms and shows how accounting for changes to the employer distribution can yield substantially larger estimates of immigrant-generated economic surplus than canonical models of labor demand.

Keywords: immigration; business dynamics; productivity; firm heterogeneity (search for similar items in EconPapers)
JEL-codes: F22 J23 J61 L11 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-bec, nep-int, nep-lab, nep-sbm, nep-tid and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Immigration and Business Dynamics: Evidence from U.S. Firms (2024)
Working Paper: Immigration and Local Business Dynamics: Evidence from U.S. Firms (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_9874

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