Immigration and Spatial Equilibrium: the Role of Expenditures in the Country of Origin

Joan Monras and Christoph Albert

No 12842, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We show that immigrants in the US concentrate in expensive cities, the earnings gap between natives and immigrants is larger in these cities, and these patterns are stronger when prices in the country of origin are lower. To rationalize this empirical evidence, we propose a quantitative spatial equilibrium model in which immigrants spend a fraction of their income in their countries of origin. Our model serves two purposes. First, to develop a new instrument for immigrant shocks that we use to test the model's predictions on native internal relocation responses. Second, to evaluate the consequences of immigration for aggregate productivity.

Keywords: Immigration; Location choices; Spatial equilibrium (search for similar items in EconPapers)
JEL-codes: F22 J31 J61 R11 (search for similar items in EconPapers)
Date: 2018-04
New Economics Papers: this item is included in nep-lab, nep-mig and nep-ure
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Citations: View citations in EconPapers (25)

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Journal Article: Immigration and Spatial Equilibrium: The Role of Expenditures in the Country of Origin (2022)
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