The causal impact of migration on US trade: Evidence from political refugees

Immigrants can increase international trade by shifting preferences towards the goods of their country of origin and by reducing bilateral transaction costs. Using geographical variation across US states for the period 2008 to 2013, I estimate the respective causal impact of immigrants on US exports and imports. I address endogeneity and reverse causality by exploiting the exogenous allocation of political refugees within the US refugee resettlement program that prevents immigrants from choosing the destination location. I find that a 10% increase in recent immigrants to a US state raises imports from those immigrants' country of origin by 1.0% and exports by 0.8%.