The Short-and Long-Run Determinants of Unskilled Immigration into US States

Nicole Simpson and Chad Sparber

No 2010-06, Working Papers from Department of Economics, Colgate University

Abstract: This paper uses a gravity model of migration to analyze how income differentials affect the flow of immigrants into U.S. states. We add to existing literature by decomposing income differentials into short- and long-term components and by focusing on newly arrived unskilled immigrants between 2000-2008. Our sample is unique in that 95 percent of our observed immigrant flows equal zero. The trade literature has advocated using the Eaton and Tamura (1994) threshold Tobit model in similar settings, and we are the first to apply the methodology to analyze the determinants of immigration. We find that recent U.S. immigrants positively respond to differences in long-term (or trend) GDP between origin countries and U.S. states. When appropriately accounting for the zero values, we also find that differences in GDP fluctuations significantly affect the flow of unskilled immigrants. In addition, we find that short-run GDP fluctuations pull unskilled immigrants into certain U.S. states, whereas GDP levels push unskilled immigrants out of their countries of origin.

Keywords: immigration; macroeconomics; GDP; gravity (search for similar items in EconPapers)
JEL-codes: E01 F2 J61 (search for similar items in EconPapers)
Date: 2010-08-24
New Economics Papers: this item is included in nep-int and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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