Immigration and Spatial Equilibrium: The Role of Expenditures in the Country of Origin
AbstractWe document that international migrants concentrate more in expensive cities—the more so, the lower the prices in their origin countries are—and consume less locally than comparable natives. We rationalize this empirical evidence by introducing a quantitative spatial equilibrium model, in which a part of immigrants' income goes toward consumption in their origin countries. Using counterfactual simulations, we show that, due to this novel consumption channel, immigrants move economic activity toward expensive, high-productivity locations. This leads to a more efficient spatial allocation of labor and, as a result, increases the aggregate output and welfare of natives.
CitationAlbert, Christoph, and Joan Monras. 2022. "Immigration and Spatial Equilibrium: The Role of Expenditures in the Country of Origin." American Economic Review, 112 (11): 3763-3802. DOI: 10.1257/aer.20211241
- F24 Remittances
- J15 Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
- J31 Wage Level and Structure; Wage Differentials
- J61 Geographic Labor Mobility; Immigrant Workers
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics