The Effects of Immigration on the Scale and Composition of Demand: A study of California establishments

Mazzolari, Francesca and Numark, David (2009): The Effects of Immigration on the Scale and Composition of Demand: A study of California establishments. Published in: Human Development Research Paper (HDRP) Series , Vol. 33, No. 2009

Abstract

We study potential economic benefits of immigration stemming from two factors: first, that immigrants bring not only their labor supply with them, but also their consumption demands; and second, that immigrants may have a comparative advantage in the production of ethnic goods. Using data on the universe of business establishments located in California between 1992 and 2002 matched with Census of Population data, we find some evidence that immigrant inflows boost employment in the retail sector, which is non-traded and a non-intensive user of immigrant labor. We find that immigration is associated with fewer stand-alone retail stores, and a greater number of large and in particular big-box retailers – evidence that likely contradicts a diversityenhancing effect of immigration. On the other hand, focusing more sharply on the restaurant sector, for which we can better identify the types of products consumed by customers, the evidence indicates that immigration is associated with increased ethnic diversity of restaurants.

• Item Type: MPRA Paper
• Language: English
• Keywords: Effects of immigration, ethnic goods, consumption diversity
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration; J - Labor and Demographic Economics > J0 - General

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