Economics at your fingertips  

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

Christoph Albert () and Joan Monras ()

No 12842, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper investigates the spatial distribution of immigrants across US cities. We document that: a) immigrants concentrate in large, expensive cities, b) the earnings gap between natives and immigrants is higher in these cities, c) these patterns are stronger when price levels in the country of origin are lower, and d) immigrants consume less locally than natives. We develop a spatial equilibrium model in which immigrants spend a fraction of their income in their countries of origin. Thus, immigrants care not only about local prices but also about price levels in their home countries, which gives them a comparative advantage for living in more productive cities, where they accept lower wages than natives. We rely on variation in the origin price level to estimate the model. Counterfactual simulations suggest that current levels of immigration have reduced economic activity in smaller, less productive cities, while they have expanded it in large, productive ones. This has increased total worker productivity by around 1% and aggregate native workers' welfare by around 0.35%.

Keywords: Immigration; location choices; spatial equilibrium (search for similar items in EconPapers)
JEL-codes: F22 J31 J61 R11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab, nep-mig and nep-ure
Date: 2018-04
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This working paper can be ordered from ... rs/dp.php?dpno=12842

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

Page updated 2019-09-19
Handle: RePEc:cpr:ceprdp:12842