Author(s)
Gianmarco I.P. Ottaviano and
Giovanni Peri
Source
Journal of Economic Geography, Vol. 6:1, pp. 9-44, 2006
Summary
U.S. cities that attracted immigrants experienced a significant increase in average wages and in housing values.
Policy Relevance
Cities that implement immigration-friendly policies, as a way of attracting a variety of skills and highly educated immigrants, benefit from productivity increases at the local level and experience increases in housing values.
Main Points
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This paper documents strong correlation: U.S.-born citizens living in metropolitan areas where the share of foreign-born increased between 1970 and 1990 experienced a significant increase in their wages and in the rental price of their housing.
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As people and firms are mobile across cities in the long run, these correlations are consistent with a net positive effect of cultural diversity on the productivity of natives.
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Cities with a more diverse set of skills are more productive, generate more jobs, and are more attractive to people who move there, resulting in a rise in the value of houses.