Christoph Albert will be presenting his publication "The Trade-Creating Effect of Immigrants: Evidence from Detailed Consumption Data" co-authored with Torsten Jaccard and Brett McCully.

The authors estimate the impact of immigrants on imports using data across a wide range of products from the Nielsen Consumer Panel and Retail Scanner data. To observe imported goods, they match varieties at the barcode-level with label information on their production origin and brand from Label Inc. To guide their empirical analysis, they develop a model of heterogeneous firms in which immigrants affect the fixed cost of importing goods from their origin country. To identify the causal effect of immigrants on imports, they construct an instrumental variable which interacts variation in (i) total immigrant inflows into the U.S. by origin country and (ii) the fraction of immigrants inflowing into a county. Using the Consumer Panel data, they find that more immigrants imply a significantly higher expenditure on respective foreign varieties by local households. Finally, they disentangle the trade impact of immigrants via decreasing fixed trade cost, the supply channel, from that via altering preferences of natives for foreign goods, the demand channel. To do so, they rely on store-level retail sales data and the key assumption that the fixed cost of trade is invariant across markets within the same retail chain, whereas natives’ preferences for goods vary across markets. With an estimate of the trade-cost reducing effect of immigrants in hand, they can estimate the welfare gains from immigrant-induced trade.

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