Immigration and Business Dynamics: Evidence from U.S. Firms

Arbeitspapier

Prior literature on the economic impact of immigration has largely ignored changes to the composition of labor demand. In contrast, this paper uses a comprehensive collection of survey and administrative data to show that heterogeneous establishment entry and exit drive immigrant-induced job creation and a rightward shift of the productivity distribution in U.S. local industries. High-productivity establishments are more likely to enter and less likely to exit in high immigration environments, whereas low-productivity establishments are more likely to exit. These dynamics result in productivity growth. A general equilibrium model proposes a mechanism that ties immigrant workers to high-productivity firms and shows how accounting for changes to the employer distribution can yield substantially larger estimates of immigrant-generated economic surplus than canonical models of labor demand.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 9874

Classification and Topics

• Classification: Wirtschaft ; Labor Demand ; Geographic Labor Mobility; Immigrant Workers ; Production, Pricing, and Market Structure; Size Distribution of Firms ; International Migration
• Subject: immigration ; business dynamics ; productivity ; firm heterogeneity

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mahajan, Parag
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/263804
• Last update: 10.03.2025, 11:43 AM CET