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CEP discussion paper
The contribution of immigration to local labor market adjustment
Michael Amior
February 2020
Paper No' CEPDP1678:
Full Paper (pdf)

JEL Classification: J61; J64; R23

Tags: immigration; geographical mobility; local labor markets; employment

The US suffers from persistent local disparities in employment rates, which should in principle be eliminated by population mobility. Can immigration accelerate this process? Remarkably, on average since 1960, new immigrants account for 40% of local population adjustment. This vastly exceeds their share of gross regional migratory flows (just 10%). I attribute the 'excess' response to their strong preference to settle in migrant enclaves, which are disproportionately located in high-employment areas (a consequence of persistent local shocks). However, immigration does not significantly accelerate local population adjustment overall, as it crowds out the contribution from internal mobility. This reduction in the internal response can help account for the concurrent decline in gross internal population flows.