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Immigration and the Economy of Cities and Regions

Ethan Lewis and Giovanni Peri ()

Chapter Chapter 10 in Handbook of Regional and Urban Economics, 2015, vol. 5, pp 625-685 from Elsevier

Abstract: In this chapter, we analyze immigration and its effect on urban and regional economies focusing on productivity and labor markets. While immigration policies are typically national, the effects of international migrants are often more easily identified on local economies. The reason is that their settlements are significantly concentrated across cities and regions, relative to natives. Immigrants are different from natives in several economically relevant skills. Their impact on the local economy depends on these skills. We emphasize that to evaluate correctly such impact, we also need to understand and measure the local adjustments produced by the immigrant flow. Workers and firms take advantage of the opportunities brought by immigrants and respond to them trying to maximize their welfare. We present a common conceptual frame to organize our analysis of the local effects of immigration, and we describe several applications. We then discuss the empirical literature that has tried to isolate and identify a causal impact of immigrants on the local economies and to estimate the different margins of response and the resulting outcomes for natives of different skill types. We finally survey promising recent avenues for advancing this research.

Keywords: Immigration; Labor markets; Skill complementarities; Innovation; Endogenous technical change; Labor supply; Immigrant enclaves; Firms; Productivity; Labor: J2, J3, J61; International: F16, F22; Production technique and innovation: O31, O33; Regional: R11, R12 (search for similar items in EconPapers)
Date: 2015
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Working Paper: Immigration and the Economy of Cities and Regions (2014) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:regchp:5-625

DOI: 10.1016/B978-0-444-59517-1.00010-6

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