Immigrant Networks and U.S. Bilateral Trade: The Role of Immigrant Income

This paper examines the role of immigrant networks on trade, particularly through the demand effect. First, we examine the effect of immigration on trade when the immigrants consume more of the goods that are abundant in their home country than the natives in a standard Heckscher-Ohlin model and find that the effect of immigration on trade is a priori indeterminate. Our econometric gravity model consists of 63 major trading and immigrant sending countries for the U.S. over 1991-2000. We find that the immigrants' income, mostly through the demand effect, has a significant negative effect on U.S. imports. However, if we include the effect of the immigrant income interacted with the size of the immigrant network, measured by the immigrant stock, we find that the higher the immigrant income the lower is the immigrant network effect for both U.S. exports and imports. This we find in addition to the immigrant stock elasticity of 0.27% for U.S. exports and 0.48% for U.S. imports. Capturing the immigrant assimilation with the level of immigrant income, this paper finds that the immigrant network effect on trade flows is weakened by the increasing level of immigrant assimilation.immigrant networks, immigrant assimilation, demand effect, trade

Immigrant Networks and the U.S. Bilateral Trade: the Role of Immigrant Income

This paper examines the role of immigrant networks on trade, particulalry through the demand effect. First, we examine the effect of immigration on trade when the immigrants consume more of the goods that are abundant in their home country than the natives in a standard Heckscher-Ohlin model and find that the effect of immigration on trade is a priori indeterminate. Our econometric gravity model consists of 63 major trading and immigrant sending countries for the U.S. over 1991 - 2000. We find that the immigrants income, mostly through demand effect, has a significant negative effect on the U.S. imports. However, if we include the effect of the immigrant income interacted with the size of the immigrant network, measured by the immigrant stock, we find that higher the immigrant income lower is the immigrant network effect for both U.S. exports and imports. This we find in addition to the immigrant stock elasticity of 0.27% for U.S. exports and 0.48% for U.S. imports. Capturing the immigrant assimilation with the level of immigrant income this paper finds that the immigrant network effect on trade flows is weakened by the increasing level of immigrant assimilation.immigrant networks, immigrant assimilation, demand effect, trade.

Nonparametric Slope Estimators for Fixed-Effect Panel Data

In panel data the interest is often in slope estimation while taking account of the unobserved cross sectional heterogeneity. This paper proposes two nonparametric slope estimation where the unobserved effect is treated as fixed across cross section. The first estimator uses first-differencing transformation and the second estimator uses the mean deviation transformation. The asymptotic properties of the two estimators are established and the finite sample Monte Carlo properties of the two estimators are investigated allowing for systematic dependence between the cross-sectional effect and the independent variable. Simulation results suggest that the new nonparametric estimators perform better than the parametric counterparts. We also investigate the finite sample properties of the parametric within and first differencing estimators. A very common practice in estimating earning function is to assume earnings to be quadratic in age and tenure, but that might be misspecified. In this paper we estimate nonparametric slope of age and tenure on earnings using NLSY data and compare it to the parametric (quadratic) effect.Nonparametric, Fixed-effect, Kernel, Monte carlo

Legalization and Immigrant Homeownership: Evidence from Spain

A significant homeownership gap still remains between natives and immigrants in most countries. Because of the many advantages of homeownership for immigrants and for the communities where immigrants reside, a variety of countries have tried to implement policies that facilitate immigrant homeownership. Many of these policies hinge on immigrants’ legal status. Yet, owing to data limitations, we still know very little about its impact on immigrant homeownership. We address this gap in the literature and find that legalization raises immigrant homeownership by 20 percentage-points even after accounting for a wide range of individual and family characteristics known to impact housing ownership. This finding underscores the importance of legal status in immigrant assimilation –housing being an important indicator of immigrant adaptation, and the need for further explorations of the impact of amnesties on the housing markets of immigrant-receiving economies.Immigration, Housing, Legal Status, Spain

Social Networks and Their Impact on the Employment and Earnings of Mexican Immigrants

We examine the impact of different types of social networks on the employment and wages of unauthorized and legal Mexican immigrants using data from the Mexican Migration Project. We find that social networks, particularly strong ties, contribute to the economic assimilation of immigrants by raising their hourly wages. However, networks do not enhance immigrants’ employability. Instead, strong ties allow for a lower employment likelihood possibly through the shelter against temporary unemployment provided by close family members. Finally, social networks do not alter the relative employment and earnings performance of unauthorized and legal immigrants in the absence of networks.