The Contribution of Immigration to Local Labor Market Adjustment

The United States faces persistent spatial disparities in joblessness, which should theoretically be eliminated by population reallocation. Can immigration accelerate this adjustment process? I estimate that new immigrants account for 40% of local population adjustment since 1960. This vastly exceeds their share of gross migratory flows (just 10%). I attribute their “excess” response to the pull of migrant enclaves, which are disproportionately located in high-employment areas (a consequence of persistent shocks). However, immigration does not significantly accelerate population adjustment overall, as it crowds out the contribution from internal mobility. This crowd-out can help explain the contemporary decline in gross internal flows.