Immigration, local crowd-out and undercoverage bias
Using decadal census data since 1960, I cannot reject the hypothesis that new immigrants crowd out existing residents from US commuting zones and states one-for-one. My estimate is precise and robust to numerous specifications, as well as accounting for local dynamics; and I show how it can be reconciled with apparently conflicting results in the literature. Exploiting my model's structure, I attribute 30% of the observed effect to mismeasurement, specifically undercoverage of immigrants. Though labor demand does respond, population mobility accounts for 90% of local adjustment. These results have important implications for both structural and reduced form estimation of immigration effects.
13 January 2020 Paper Number CEPDP1669
This CEP discussion paper is published under the centre's Labour markets programme.