Academic journal article International Journal of Economic Development

Immigrant Location Decisions and Outcomes

Academic journal article International Journal of Economic Development

Immigrant Location Decisions and Outcomes

Article excerpt


The majority of the latest wave of immigration has gone to only a handful of the largest U.S. metropolitan area. The robust economic performance of these "immigrant centers" has sparked a debate about merits of attracting foreign-born immigrants as part of a strategy to stem population loss and spur economic growth in economically lagging metro areas. However, any policy decisions require a better understanding of the nature and spatial implications of immigrants' location decisions. We employ a nonlinear model that uses two key individual location decision factors to predict the distribution of foreign-born citizens among metropolitan areas at three (U.S. Census) points in time: 1980, 1990, and 2000. The model guides an examination of the consequences in time of spatial distribution of immigrants based on the assumption that location decisions are driven by concentrations of co-ethics more than employment opportunity.


Throughout American history, immigration has affected culture, politics, and the economy in momentous ways. Essentially a land of immigrants, the US has absorbed repeated waves of newcomers contributing to the country's economic growth, while aspiring to improved quality of life. Immigrants in search of economic opportunity have had a presence in all economic sectors (Winnick, 1990; Muller, 1993).

The arrival of immigrants stimulates local housing construction, consumption, and demand for services, as well as commercial and banking activities, which in turn stimulate economic growth. Thus effects of immigration are no different from those of natural population growth (births in excess of deaths) and in-migration (1) from other regions of the country. However, diversity of minds and ways of life accompanying immigration have the added benefits of new market demands for different products and services and new marketable ideas that can contribute to economic diversification of the economy and add to its robustness.

An added argument in favor of immigration is that driven to the US by economic aspirations, immigrants may arrive with a resolve to contribute and be rewarded by the market that might exceed that of the native-born population. Researchers recognize the role played by immigrants' personal ambitions and have devised means to measure their entrepreneurship levels relative to native-born Americans (Winnick, 1990; Borjas, 1990). On average, immigrants' drive and place in society lead to a higher self-employment. Muller (1993, 1998) found a positive correlation between rates of in-migration and job growth, as well as a positive correlation between the percentage of the foreign-born and the economic well being of natives. This, in conjunction with work by Richard Florida (2000; 2002) suggesting that the greater the diversity of metropolitan areas, the more attractive they are to certain desirable industries such as high-tech, strengthens the case for beneficial effects of immigration.

Such economic arguments have historically garnered support for immigration, but counter-positions exist. Sometimes rooted in xenophobic tendencies, and at other times in fear over job loss and wage deflation, resistance to immigration has been a very powerful political and social force (Simon, 1989; Borjas, 1990; Muller, 1993.) Arguments leveled against unimpeded immigration have nationalistic and economically intuitive appeal, which accounts for periodic moves throughout history to restrict or to selectively discourage immigration. Often, arguments for, or against, immigrants from specific regions are couched in economic terms, with some of the newcomers predicted to become an economic burden and others expected to boost it.

During the rise of industrialization in the U.S. in the late Nineteenth and early Twentieth Centuries, for example, immigration helped fuel economic growth by meeting the labor demand of northern manufacturers (Mooney, 1990; Denison, 1962). …

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