Immigrant location decisions and outcomes.

• Author: Kaufman, Sanda
• Position: Report

Abstract

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.

INTRODUCTION

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). However, as globalization put increasing pressure on these industries during the 1970's and 1980's, wages and employment opportunities for low-skilled workers were negatively affected by the presence of immigrants with similar skills (Kuznets, 1977 and Defreitas & Marshall, 1983 as cited in Simon, 1989). It follows that the immigration's economic effects are dependent on local or regional characteristics such as the state of the economy at arrival, the nature of the local demand, and the supply of certain skills.

The result of the perennial tension between expectations of economic benefits from immigration and fear of a reduction in the number of jobs available to all others and of increasing social welfare expenditures results in an ambiguous, and often inconsistent, national policy on immigration. Mixed political motives are overlaid on the cyclical nature of the American economy that at times demands more labor while at other times cannot employ all Americans at desired wage levels.

There is currently a strong impetus to understand both the mechanics of immigration and its effects on the economies of urban areas. Researchers contend that data, showing economic growth and rising per capita incomes following waves of immigration, provide a strong rationale to conclude that immigrants improve the standard of living of the host population (Borts & Stein, 1964; Chiswick, 1982; Kuznets, 1964; Mooney, 1990; Muller, 1998). Some authors nevertheless caution that costs of immigration may exceed benefits, as when the immigrants' (low) skill characteristics drive up income inequalities (Chiswick, 1992), or cause per capita incomes to fall (Borts & Stein, 1964), and poverty to increase (Camarota, 1998).

Faced with depressed economies, older manufacturing cities searching for policy solutions have begun to consider strategies to attract immigrants. Cities frustrated by economic decline and shrinking population see in-migration as a possible response. However, policy design requires clarity as to whether population trends are causes or consequences of rigional economic health (Greenwald, 1975; Muth, 1971). Should they be a cause or even a necessary condition, it would follow that policies designed to attract people to a region--whether from other regions or from other countries--could contribute to a reversal of economic decline. It is critical to understand the relationship between economic health and a growing population, since policy measures to attract immigrants can be costly and may result in added tax burdens if the presence of immigrants does not improve the local economy. Costs and benefits of immigration appear to be temporally sensitive and dependent on characteristics of both immigrants and economies in which they settle. Therefore, at a time and place characterized by a declining or stagnant population, it seems the prospect of immigrant-led population growth should be welcomed, though potential benefits would hinge on immigrant education, skills, socio-economic status, and on the costs of absorbing this influx.

If immigration has a positive effect on economic development, can it be fostered through public policy? What decision factors should policies include? To answer this question it is necessary to understand the components of an individual's decision to migrate, including the complex array of "push" factors that impel people to leave their initial location and "pull" factors that attract them to specific locations in the US.

Push factors include political and economic hardships (Zavodny, 1998) in the immigrants' native countries. Pull factors include work opportunities in general, demand for specific skills, business climate, and presence of like communities. From an emigre's perspective, push factors are affected by education, skills, language skills and age-related factors affecting mobility--life cycle stage, economic endowment, and subjective likelihood of success. Pull factors combine with the prospects of community and family assistance, and social climate at the target location.

Since no push factor and only a subset of the pull factors are susceptible to policies, it is necessary to understand the cumulative spatial outcome of individual location decisions, to enable prediction of outcomes and assessment of likelihood of success of policy decisions. This article begins to address this need by proposing a non-linear 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 first section takes an immigrant's decision perspective to explore pull factors that could translate into policy elements. The second section describes the proposed model and results using the top 48 metropolitan areas (according to population size in 2000). The article concludes with an assessment of how the model could be refined and how its results could inform the issues facing policy makers in declining metropolitan areas.

INDIVIDUAL IMMIGRANT DESTINATION CHOICE

Devising policies that attract immigrants to regions that are atypical destinations requires an understanding of the expected results of an influx of an immigrant population, as well as the mechanisms by which individuals make destination choices. This section examines immigration trends as aggregates of individual choices, in contexts of growing and declining economies, to derive insights useful to policy decisions. After outlining the essence of individual emigration decisions in terms of push and pull factors, we examine immigration impacts on current immigration centers, as well as areas that are not traditionally targets of immigration that have seen their recent share of newcomers rise.

The decision to immigrate has two components: the decision to leave the country of origin, which is a response mainly to origin push factors, and the choice of a target location, which is a function mainly of destination pull factors. The...