Immigration, regional resilience, and local economic development policy

Abstract

The rapid growth of immigrants across a wide range of U.S. metropolitan areas has brought increasing attention to immigration and its impacts on regional development. Recent economic recessions have also stimulated a renewed interest in sustainable development among urban planners and scholars. This dissertation examines the role of immigrants in regional economic resilience and the effects of the rising wave of local immigrant integration policies. Drawing on data from various sources, including the U.S. Decennial Census, the Bureau of Economic Analysis, the Bureau of Labor Statistics, and the Building Resilient Regions (BRR) database, this dissertation explores three independent but interconnected themes. The first theme focuses on resilience capacity and examines how immigrants have helped U.S. regions build resilience capacity over the period 1980-2010. With a fixed effects approach, this investigation finds that immigrants contribute to the development of the economic capacity, socio-demographic capacity, and community connectivity capacity of regional systems, though some of the effects are small. The second theme considers regional economic resilience in the face of the recent Great Recession. Its focus is on how regions respond to and recover from the recession, different from the resilience capacity perspective that emphasizes preparedness for disturbances. To address the potential endogeneity of immigrants’ residential choice, this analysis employs an instrumental variable approach to isolate the portion of immigration exogenous to the local economic conditions. It finds that high levels of immigration lead to regional resilience during and after the recession in both employment and per capita income growth. This positive relationship is independent of other regional capacities identified in previous studies, suggesting that the resilience literature should broaden its scope and consider local immigration as a critical contributor to resilience building. Focusing on the Global Detroit initiative as a case study, the third theme investigates whether the latest local immigrant policies have achieved their intended goals. Global Detroit is one of the earliest regional immigrant integration efforts in the country, therefore providing a long enough post-treatment period for evaluation. This analysis constructs a synthetic control group almost identical to Detroit and finds mixed evidence of the program effects on local immigration level, immigrant employment, and immigrant entrepreneurship. While the Global Detroit initiative has increased immigrants’ shares in the local population and workforce, it has not increased their upward mobility as indicated by the average wage earning and self-employment rate. These findings underscore the potential of immigrant integration programs in attracting and retaining immigrants as well as the need for program improvement to address broader labor market dynamics and developmental issues.