Publications

23. Migration and International Trade: The US Experience Since 1945. Edward Elgar Publishing: Cheltenham, UK and Northampton, MA, USA (Forthcoming, June 2010).

Description: This book examines the influence of immigrants on US imports from and exports to their respective home countries. An overview of the immigrant-trade link is provided along with a discussion of the related theoretical intuition/framework and a review of the literature. A series of related hypotheses are addressed during the empirical analysis, and underlying factors that may affect the operability of the link are examined. Following presentation of the empirical results, the work concludes by considering the public policy implications.

22. “Long-Run Wage and Earnings Losses of Displaced Workers,” Applied Economics (Forthcoming, June 2010).

Abstract: Displacement-related losses are estimated using NLSY79 data that span the years 1979-2000. The typical displaced worker faces losses of $34,065 during the period four years prior through five years following displacement. Proportionally, this represents a 10.8 percent loss compared to earnings of similar non-displaced workers over the period. Considerable variation in losses is reported across worker types. Union, male and more mature workers suffer greater losses, respectively, than do their non-union, female and younger counterparts. College graduates and high school dropouts are found to suffer lower losses compared to high school diploma holders and those who completed some college.

21. “Refugee and Non-Refugee Immigrants, Cultural Distance and US Trade with Immigrant Home Countries” Journal of International Trade & Economic Development (Forthcoming, Spring 2010). [Co-author: Bedassa Tadesse, University of Minnesota – Duluth].

Abstract: Employing data on US immigrants and trade with 59 home countries for the years 1996-2001, we compare the extent to which refugee and non-refugee immigrants affect US trade with their home countries and provide the first evidence of variation in the US immigrant-trade relationship across immigrant types. We also consider the abilities of refugee and non-refugee immigrants to offset the trade-inhibiting influence of cultural distance. Our results show that while immigrants, in general, exert positive influences on US imports from- and exports to- their home countries, the influence of refugee immigrants is quite minimal when compared to that of non-refugee immigrants. For both immigrant types, however, evidence supporting the notion that immigrants act to offset cultural distance is observed. To conceptualize the economic meaning of our results, we provide estimates of the extent to which each type of immigrants offset transport costs.

20. “Does Cultural Distance Hinder Trade in Goods? A Comparative Study of Nine OECD Member Nations,” Open Economies Review (Forthcoming, February 2010) [Co-author: Bedassa Tadesse, University of Minnesota – Duluth].

Abstract: Using data for 67 countries, we examine the effect of cultural distance, a proxy for the lack of minimum reservoir of trust necessary to initiate and complete trade deals, on bilateral trade. Utilizing a modified gravity model that accounts for the standard factors thought to inhibit/facilitate trade flows, we find the cultural dissimilarity of nations reduces aggregate and disaggregate bilateral trade flows, with estimated effects varying in magnitude and economic significance across the OECD reference countries and product classifications. Our findings imply that estimates from prior studies, which fail to account for the effect of cultural distance, are generally biased.

19. (2010) “Cultural Diversity, Immigration and International Trade: Some Empirical Observations from Nine OECD Host Countries,” in Lydia B. Kerwin (ed.) Cultural Diversity: Issues, Challenges and Perspectives, Nova Science Publishers: Hauppauge, NY [Co-author: Bedassa Tadesse, University of Minnesota – Duluth].

Printed in abridged form: (2010) “Cultural Diversity, Immigration and Trade: A Study of Nine OECD Host Countries,” Journal of Current Issues in Finance, Business and Economics 3, 1.

Abstract: Employing a variant of the standard gravity equation and data from nine OECD immigrant host countries and 67 trading partners for the years 1996-2001, we examine the immigrant-trade relationship. Particular emphasis is placed on the potential influences of host country cultural diversity and host-home cultural distance. Data from the World Values Surveys and the European Values Surveys are used to calculate the cultural distances between immigrants’ host and home countries. Cultural distance is taken to be a proxy measure for the extent to which immigrants’ host countries are culturally divergent from their home countries. To estimate the cultural diversity of each host country’s population during our reference period, we calculate Simpson Index of Diversity values. We find that greater cultural differences inhibit both host country imports and exports, with imports seemingly affected to a greater extent. We also observe that immigrants increase trade flows, perhaps by exploiting superior information regarding host country markets (relative to their home country counterparts) and home country markets (relative to their host country counterparts) and/or by acting as conduits that bridge cultural differences between their host and home countries. Greater cultural diversity within the host country population is found to be positively correlated with the estimated proportional influences of immigrants on trade. Our findings imply that immigrants play greater roles in facilitating international trade than is generally discussed in the literature: fully or partially offsetting the influences of the lack of trust and commitments that may correspond with greater cultural differences between potential trading partners.

18. (2010) “Cultural Distance as a Determinant of Bilateral Trade Flows: Do Immigrants Counter the Effect of Cultural Distance?” Applied Economics Letters 17, 2: 147-152 (February). [Co-author: Bedassa Tadesse, University of Minnesota – Duluth].

Abstract: We introduce "cultural distance” as a measure of the degree to which shared norms and values in one country differ from those in another country, and employ a modified gravity specification to examine whether such cultural differences affect the volume of trade flows. Employing data for US state-level exports to the 75 trading partners for which measures of cultural distance can be constructed, we find that greater cultural differences between the US and a trading partner reduces state-level exports to that country. This result holds for aggregate exports, cultural and non-cultural products exports as well, but with significantly different magnitudes. Immigrants are found to exert a pro-export effect that partially offsets the trade-inhibiting effects of cultural distance.

17. (2009) “Displacement-Related Earnings Losses: Evaluating Trade Adjustment Assistance and Wage Insurance,” Labor Studies Journal 34, 2: 219-234 (June).

Abstract: We examine the effectiveness of stylized versions of the Trade Adjustment Assistance (TAA) and Alternative Trade Adjustment Assistance (ATAA), or wage insurance) programs in terms of reducing displacement-related earnings losses. Wage insurance subsidies and returns to TAA-funded training are applied to loss estimates generated using NLSY79 data spanning the 1979-2000 period. Wage insurance is estimated to reduce earnings losses, for the typical worker, by 14.4 percent, while TAA-funded training is estimated to reduce losses by 23.7 percent. However, due to variation in the time paths and magnitudes of earnings losses, proportional reductions in losses vary considerably across worker types.

16. (2009) “Immigration, Trade and Home Country Development: State-Level Variation in the US Immigrant-Export Link,” Journal of International Migration and Integration 10, 2: 121-143 (May).

Abstract: We report variation across home countries, by level of development, in the absolute and proportional influences of immigrants on US state-level exports. Data for aggregate exports from the 48 contiguous United States to 28 immigrant home countries is employed to replicate and extend the analysis undertaken by Co et al. (2004). As immigrant populations and trade patterns vary across states and regions, we find significant variation across geographic locales. Although the typical immigrant from a developed nation exerts a relatively greater absolute effect on state-level exports, immigrants from developing nations increase state-level exports to their respective home countries proportionally more so than do immigrants from developed nations. The findings emphasize the importance, with respect to empirical research, of how development is defined and inform both policy and the public debate on an issue of particular interest.

15. (2009) “Political Affiliation and Perceptions of Trade: Examining Survey Data from the State of Georgia,” Contemporary Economic Policy 27, 2: 176-192 (April). [Co-author: Richard Clark, University of Georgia].

Abstract: Determinants of trade policy preferences are identified and the possible influences of political party affiliation and self-identification as politically conservative, centrist or liberal are examined. While majority support for trade is reported for all political classifications, Republicans are found 13.7 to 15.1 percent more likely than Democrats and independents to support trade. Similarly, conservatives are 14.8 to 21 percent more likely to support trade than centrists and liberals. However, on particular issues, distinctions exist between very conservative and somewhat conservative cohorts. The influence of education is non-linear. High school graduates and individuals who have completed some college coursework are more likely to oppose trade. High school dropouts oppose trade when confronted with statements concerning job creation and income inequality. Higher income levels are associated with support for trade as are higher average weekly earnings in the respondent’s county of residence. Homeowners appear sensitive to potentially detrimental trade-related domestic labor market outcomes.

14. (2009) “East-West Migration and the Immigrant-Trade Link: Evidence from Italy,” The Romanian Journal of European Studies 5-6/2007: 67-84 (April) (Special Issue on Migration). [Co-author: Bedassa Tadesse, University of Minnesota - Duluth].

Abstract: Employing data for Italy and 68 trade partners that span the period 1996-2001, we examine the role of immigrants in influencing Italian exports to and imports from their respective home countries. Particular emphasis is placed on variation in the immigrant-trade relationship across Former Soviet Republic (FSR) and Post-Communist (PCOM) home country classifications relative to immigrants from non-FSR and non-PCOM home countries. The findings provide information that may assist in policy formulation and lead to more enlightened public and political debates of the issue. Immigrants are generally found to exert pro-trade influences; however, the typical immigrant from an FSR or PCOM home country exerts greater absolute influences on Italian-home country trade as compared to immigrants from non-FSR and non-PCOM home countries.

13. (2009) “Immigration, Trade and Product Differentiation,” Economic Issues 14, 1: 46-63 (March).

Abstract: Immigrant-trade links are examined with an emphasis on variation across product types and home country income classifications. Data for the US and 70 trading partners spanning the 1980-1997 period are employed. The immigrant-trade relationship varies with product differentiation and home country per-capita income. In response to a hypothetical 10 percent immigrant stock increase, US imports of differentiated goods from high income countries increase by approximately 2 percent. A like increase in the immigrant stock from low income countries increases US differentiated goods imports by 4.25 percent, while homogenous goods exports increase by 2.5 to 4.3 percent.

12. (2008) “Immigrants, Cultural Distance and US State-Level Exports of Cultural Products,” North American Journal of Economics and Finance 19, 3: 331-348 (December). [Co-author: Bedassa Tadesse, University of Minnesota – Duluth].

Abstract: We examine the relationships between immigrants, cultural distance and state-level exports, employing state-specific immigrant stocks and total US immigrant stocks, separately, and a measure of cultural distance recently introduced by Tadesse and White (2007). A positive link between immigrants and aggregate exports is reported and, while cultural distance is found to reduce exports, immigrants partially offset the effects of cultural distance by increasing both the intensity of existing exports and the likelihood that exporting occurs. However, heterogeneity in immigrant effects is observed across cultural product sub-classifications, suggesting variation in the ability of immigrants to influence trade by overcoming information asymmetries.

11. (2008) “State and Regional Variation in the Effects of Trade on Job Displacement in the US Manufacturing Sector, 1982-1999,” Journal of Labor Research 29, 4: 347-364 (December).

Abstract: Worker-level data from the 1984-2000 Displaced Worker Surveys is employed to examine geographic variation in the effects of trade on manufacturing workers’ probabilities of job displacement. Considerable variation is reported across regions. The net effect of trade is an increase in displacement probabilities for workers in the North Central and Middle Atlantic regions, yet trade has led to lower displacement probabilities in the Plains/West and Pacific regions. Examination at the state-level results in similar variation, although the estimated effects of trade in many instances are ambiguous as estimated displacement probabilities increase or decrease dependent upon the measure of trade employed.

10. (2008) “Do Immigrants Counter the Effect of Cultural Distance on Trade? Evidence from US State-level Exports,” Journal of Socio-Economics 37, 6: 2304-2318 (December). [Co-author: Bedassa Tadesse, University of Minnesota - Duluth].

Abstract: We examine the effects of immigrants and cultural distance on US state-level exports, and discuss the economic significance of the extent to which immigrants may offset the influence of cultural distance on the initiation and intensification of state level exports. We find greater cultural differences between the US and immigrants’ home countries reduce the likelihood that exporting occurs and, when exporting is taking place, immigrants intensify exports, thus exerting a pro-export effect that partially offsets the trade-inhibiting effects of cultural distance. While the effects of cultural distance and immigrants are larger on the level of exports than the likelihood of exports to occur, we find significant variation across states both in the export initiation and intensification effects of immigrants and cultural distance.

9. (2008) “Cultural Distance and the US Immigrant-Trade Link,” The World Economy 31, 8: 1078-1096 (August). [Co-author: Bedassa Tadesse, University of Minnesota – Duluth].

Abstract: Using data from the World and the European Values Surveys, we estimate cultural distances between the US and 54 immigrant home countries and examine the influence of cultural distance and immigrant populations on US-home country trade for the years 1997-2004. Our study indicates that the trade-enhancing effect of immigrants partially offsets the trade-inhibiting effect of cultural distance. Further, decomposing our measure of cultural distance and revisiting the immigrant-trade relationship, we find significant variation in the extent to which immigrants counter the trade-inhibiting influences of underlying dimensions of culture on imports and exports. Our findings have the implication that by countering the trade-inhibiting influences of cultural differences between their home and host countries, immigrants exert pro-development effects.

8. (2008) “Import Source Reallocation and US Manufacturing Employment, 1972-2001,” Open Economies Review 19, 3: 403-410 (July).

Abstract: Examining trade-related employment dynamics, we focus on the potential employment effects of shifts in import sources from relatively high- to low-income nations. Data for 384 6-digit NAICS US manufacturing industries that span the years 1972-2001 are utilized. Increased import penetration is found to reduce both production and non-production employment; however, such job loss is countered by export-led job creation. Extending the literature, we report that reallocation of import sources from high- to low-income nations reduces manufacturing employment, and when shifts in import sources coincide with rising import penetration the result is an acceleration of job loss.

7. (2008) “Exploring a US Immigrant – Intra-Industry Trade Link,” Eastern Economic Journal 34, 2: 252-262 (Spring).

Abstract: We extend two strands of literature: the determinants of intra-industry trade (IIT) and the effect of immigration on trade flows. Product-level (HS10) data for US trade with 62 nations spanning the years 1989-2001 are employed to construct industry-level (HS6) IIT values. A positive relationship is reported between immigration and the level of intra-industry trade. Immigration also increases vertical IIT and horizontal IIT; however, coefficients are found to be of greater magnitude for the latter measure. Examining variation across home countries, immigrants from lower income countries appear to exert a greater influence on intra-industry trade measures than do immigrants from higher income countries.

6. (2007) “An Examination of the Danish Immigrant-Trade Link,” International Migration 45, 5: 62-86 (December).

Abstract: This paper investigates the influence of immigrants on Danish imports and exports. As public and political debates concerning immigration policy are expected to continue, the findings presented here provide valuable information. Prior to 2002, Denmark’s immigration policy was among the most liberal in Europe. However, concerns regarding terrorism, social services depletion and detrimental labor market effects, all purported to stem from immigration, have led the Danish government to severely tighten its policy. In examining Denmark, we explore the immigrant-trade relationship for a small host country that is open to trade, well-integrated globally and proximate to both major trading partners and primary immigrant source nations. Further, that immigrants increased as a share of the Danish population from 2.6 to 5.6 percent from 1980 to 2000 presents an opportunity to consider immigrant-trade links for an increasingly diverse population that, initially, was relatively homogenous. We consider variation across home countries by level of development and by degree of product differentiation, employing data for 170 countries (classified as high, upper middle, lower middle or low income) that span the years 1980-2000. Trade values, coded at the 4-digit Standard Industrial Trade Classification industry level, are classified as differentiated or homogenous (reference-priced or organized exchange) goods. We report positive immigrant-trade links, with the typical immigrant increasing annual Danish exports to their respective home country by $352 to $426 and annual imports from the home country rising by $394 to $407. Variation in immigrant-trade links is reported across home country income classifications and across product classifications. Links are of greatest magnitude when trade with high income countries is considered and weakest, yet still positive, when we examine trade with low income countries. The findings presented here, when considered in relation to prior research, suggest the presence and magnitude of immigrant-trade links vary according to host country population homogeneity.

5. (2007) “Immigration Policy, Cultural Pluralism and Trade: Evidence from the White Australia Policy,” Pacific Economic Review 12, 4: 489-509 (October) (Special Issue on Globalization). [Co-author: Bedassa Tadesse, University of Minnesota - Duluth].

Abstract: We examine a potential immigrant-trade link for Australia using data for 101 trading partners that span the years 1991-2000. We report that immigrants from nations privy to preferential treatment under the White Australia policy have negligible effects on Australian trade. However, immigrants from nations that, historically, were not afforded preferences typically increase exports to and imports from their respective home countries by $1,887 and $865, respectively. This suggests immigration that increases cultural pluralism may positively influence trade. Immigrants increase trade in differentiated products to a greater extent than trade in homogenous products. Similarly, with respect to non-manufacturing products, immigrants tend to increase exports more than imports. However, when considering the influence of immigrants on trade in manufacturing products we see that imports increase more than exports.

4. (2007) “Immigrant-Trade Links, Transplanted Home Bias and Network Effects,” Applied Economics 39, 7: 839-852 (April).

Abstract: Macro-level data for the U.S. and 73 trading partners spanning the years 1980-2001 is used with a gravity specification to investigate the influence of immigration on bilateral trade. Prior research has identified immigrant stocks as a significant determinant of trade; however, this study indicates that the U.S. immigrant-trade link is driven by immigration from relatively low income countries. A 10 percent increase in the immigrant stock is found to generate respective 4.7 and 1.5 percent increases in domestic imports from and exports to the typical low income home country. The observed link is decomposed into two hypothesized channels – network effects and transplanted home bias. Considerable variation in per-immigrant trade effects is found across home countries: Imports from the typical low income home country are estimated to increase by up to $2,057 due to transplanted home bias and by as much as $2,967 as a result of network effects, while exports rise by up to $910 as a result of networks.

3. (2007) “Import Competition and Job Displacement: Evidence from US Manufacturing, 1981-1999,” The International Trade Journal 21, 1: 1-23 (Winter).

Abstract: The relationship between import competition and job displacement is examined using Displaced Worker Survey data and industry-level trade quantity and price data. Analysis is undertaken for the full manufacturing workforce and for various worker types. Heterogeneity in employment effects across worker types is first reported here. Import competition is found to increase displacement rates for high school graduates, workers who have completed some college, non-union workers and workers aged 44 years or less. Increased exports, business cycle upturns and positive domestic demand shifts are all found to temper the job displacing effects of rising import competition.

2. (2007) “What Can Industry Trade Orientation Tell Us About Trade-Related Employment Dynamics?” Journal of Humanities & Social Sciences 1, 1 (January).

Abstract: We explore whether imports and exports affect industry employment differently based on the industry’s trade orientation. Effects of trade are examined for both production and non-production employment using data for 384 6-digit manufacturing industries, classified by the North American Industrial Classification System (NAICS), and 116 trading partners that span the years 1972 to 2001. Additionally, we consider potential employment effects stemming from shifts in import sources from high- to low-income nations. The findings confirm theory and provide a more detailed portrait of trade-related employment dynamics. As the United States further liberalizes trade, net job loss may be expected in more labor-intensive industries that run trade deficits and possess lower than average levels of technology. Export-oriented industries characterized by more capital-intensive production and possession of above-average levels of technology are expected to see net job creation.

1. (2006) “Import Competition and the Probability of Job Displacement in US Manufacturing, 1983-1999,” International Journal of Applied Economics 3, 2: 40-60 (September).

Abstract: The trade-displacement relationship is examined using observations from the 1984-2000 Displaced Worker Surveys and corresponding industry data. Increases in import penetration and decreases in import prices correlate with higher displacement rates. Considerable variation in the effects of import competition on displacement probabilities is found across worker types. For example, the estimated displacement probability for a minority female who is not a union member but who has completed some college coursework ranges from 6.44 to 7.13 percent. This is significantly higher than the range estimated (1.02 to 1.24 percent) for college-educated, white, male union members. Setting import competition values equal to zero, we see estimated displacement probabilities for such workers decrease by 0.05 to 0.07 percentage points. Non-union, minority female workers with some college education realize reductions of 0.40 to 2.56 percentage points in their probabilities. Thus, workers most at risk of displacement are also most affected by import competition.

Last updated: January 18, 2010.