The role of immigrants in the United States labor market and Chinese import competition

Abstract

Research has shown a limited labor mobility response to trade shocks. However, existing studies of aggregate mobility may miss important heterogeneity. This paper proposes a mechanism through which local labor markets adjust to trade shocks, namely immigrant mobility. I find a relative decline in the immigrant population in areas more exposed to import growth from China. An interquartile increase in Chinese import exposure decreases the immigrant population by 5.4% but has little effect on the native population. Additionally, immigrant mobility mitigates the effects of trade shocks on native labor outcomes. The present study shows that natives in areas with more immigrants experience smaller declines in employment relative to areas with fewer immigrants.