Time: 10:00 am- 11:30 am, Nov. 8th, 2024
Speaker: Ariel Weinberger
(George Washington University)
Venue: 1F, Wanzhong Building, Langrun Garden, Peking University
Platform: Zoom
Meeting ID: 994 5991 6531
Passcode: inse
Abstract:
The immigration debate is very contentious, with both sides sticking to indelible arguments that might be viewed as not internally consistent. With regards to inflation, immigration opponents tend to cite the competition and demand over scarce resources. At the same time, opponents also argue that immigration reduces wages, which is contradictory with concerns about inflation. On the other side, proponents of immigration tend to argue that immigrants are important to reduce inflation in filling labor supply shortages, but there is also a large literature on the positive effect of immigration on native wages which would seem to go against the lower inflation story. For this reason a rigorous empirical analysis that attempts to separate parts of the cost of living, and reconcile these seemingly mutually incompatible views, is warranted. What are local effects on prices due to changes in the number and composition of consumers? What are the effects specifically from more immigrants in the location of production? To address these questions we contribute in 3 ways to the debate. First, we follow a new approach by Terry et al. (2024) to construct county-level instruments, which builds on the often-used shift-share approach of Card (2001). Second, using unique micro-level data on prices allows us to link where a product is sold with the location of its production, thus separating the demand and supply-side cost of living effects. Third, we construct a quality- and variety-adjusted firm price index at the frontier of the literature on firm heterogeneity (Hottman et al. 2016). Thus, we decompose our findings on prices on the changes in prices of continuing goods and the contributions of new goods and the estimated quality.
We show that the overall effect of immigration on a welfare-relevant price index is negative. When we differentiate between immigration exposure to the firm in the county that it sells its products and the exposure in the counties where its establishments produce, there is a clear negative and significant effect on prices in the counties where firms are exposed on the demand side but the supply exposure is weaker and positive. This suggests that the reduced-form effect is driven more-so by changes in demand, and adds to the scant evidence in this regard (Lach, 2007). We find an important contribution for changes in prices of continuing varieties and quality.
Speaker:
Ariel Weinberger is an assistant professor of International Business at the George Washington University School of Business. Professor Weinberger specializes in the efficiency and distributional implications of international trade and financial globalization, with a focus on both developing and developed countries. His research examines frameworks in which there is imperfect competition or other distortions potentially present in markets. Dr. Weinberger publishes in leading Economics journals, including Journal of International Economics, Review of Economics and Statistics, and Economic Journal. Ariel Weinberger joined the International Business department at GW as an Assistant Professor in 2019. Previously, he was an assistant professor of Economics at the University of Oklahoma for 4 years, as well as a research associate at the Dallas Federal Reserve Bank. He received his Ph.D. in Economics from the University of California, Davis in 2015. Prior to his doctoral studies, Ariel received a B.S. in Management Science from UC-San Diego and worked for two years at the St. Louis Federal Reserve Bank.
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