Anywhere they go, we go: Immigration inflow’s impact on co-ethnic natives

Using data from the 1970, 1980, 1990, and 2000 Censuses, and the American Community Survey five-year sample for 2006–2010, we examine the impacts of immigration inflows on migration patterns and wages of the co-ethnic native born in the U.S. We also study whether these migration patterns are driven by changes in labor market returns in receiving cities, socio-cultural benefits of being surrounded by co-ethnic immigrants, or lower housing prices in ethnic neighborhoods due to immigration. We show that a higher ethnicity-specific immigrant population share within a city increases the population shares of the pre-existing co-ethnic native born who remain in the receiving cities and of the out-of-town co-ethnic native born who migrate into the receiving cities, relative to natives of other ancestries. We could not find evidence that immigration inflows have any effect on the wages of co-ethnic natives in the local labor market, and therefore could not be the reason for the migration patterns of co-ethnic natives. Furthermore, results from heterogeneous effect estimations, which use various methods to separate co-ethnic natives according to their ethnicity-specific socio-cultural attachments, are consistent with the conjecture that socio-cultural benefits brought about by immigration inflows in local markets could be an important factor driving the migratory patterns of co-ethnic natives. We also find some evidence suggesting that the lower neighborhood housing prices caused by natives of other ethnicities leaving the immigrant-receiving cities might have played a role in co-ethnic natives’ migration decisions. All of the baseline empirical results survive various robustness and falsification tests, as well as two separate instrumental variable estimations, which utilize two measures that combine historical ethnicity-specific immigrant share in local labor markets with immigrants’ home country GDPs and inequality indices, respectively.