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Leveraging the Power of Place: A Data-Driven Decision Helper to Improve the Location Decisions of Economic Immigrants

Author

Listed:
  • Jeremy Ferwerda
  • Nicholas Adams-Cohen
  • Kirk Bansak
  • Jennifer Fei
  • Duncan Lawrence
  • Jeremy M. Weinstein
  • Jens Hainmueller
Abstract
A growing number of countries have established programs to attract immigrants who can contribute to their economy. Research suggests that an immigrant's initial arrival location plays a key role in shaping their economic success. Yet immigrants currently lack access to personalized information that would help them identify optimal destinations. Instead, they often rely on availability heuristics, which can lead to the selection of sub-optimal landing locations, lower earnings, elevated outmigration rates, and concentration in the most well-known locations. To address this issue and counteract the effects of cognitive biases and limited information, we propose a data-driven decision helper that draws on behavioral insights, administrative data, and machine learning methods to inform immigrants' location decisions. The decision helper provides personalized location recommendations that reflect immigrants' preferences as well as data-driven predictions of the locations where they maximize their expected earnings given their profile. We illustrate the potential impact of our approach using backtests conducted with administrative data that links landing data of recent economic immigrants from Canada's Express Entry system with their earnings retrieved from tax records. Simulations across various scenarios suggest that providing location recommendations to incoming economic immigrants can increase their initial earnings and lead to a mild shift away from the most populous landing destinations. Our approach can be implemented within existing institutional structures at minimal cost, and offers governments an opportunity to harness their administrative data to improve outcomes for economic immigrants.

Suggested Citation

  • Jeremy Ferwerda & Nicholas Adams-Cohen & Kirk Bansak & Jennifer Fei & Duncan Lawrence & Jeremy M. Weinstein & Jens Hainmueller, 2020. "Leveraging the Power of Place: A Data-Driven Decision Helper to Improve the Location Decisions of Economic Immigrants," Papers 2007.13902, arXiv.org.
    • Handle: RePEc:arx:papers:2007.13902
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    References listed on IDEAS

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    1. Jennifer Hunt & Marjolaine Gauthier-Loiselle, 2010. "How Much Does Immigration Boost Innovation?," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(2), pages 31-56, April.
    2. Burchardi, Konrad & Terry, Stephen & Chaney, Thomas & Tarquinio, Lisa & Hassan, Tarek, 2020. "Immigration, Innovation, and Growth," CEPR Discussion Papers 14719, C.E.P.R. Discussion Papers.
    3. Raj Chetty & Nathaniel Hendren & Lawrence F. Katz, 2016. "The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment," American Economic Review, American Economic Association, vol. 106(4), pages 855-902, April.
    4. Damm, Anna Piil, 2014. "Neighborhood quality and labor market outcomes: Evidence from quasi-random neighborhood assignment of immigrants," Journal of Urban Economics, Elsevier, vol. 79(C), pages 139-166.
    5. Olof Åslund & Dan-Olof Rooth, 2007. "Do when and where matter? initial labour market conditions and immigrant earnings," Economic Journal, Royal Economic Society, vol. 117(518), pages 422-448, March.
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    Cited by:

    1. Justin Hadad & Alexander Teytelboym, 2022. "Improving refugee resettlement: insights from market design," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 38(3), pages 434-448.
    2. Gina Galindo & Jose Navarro & Jhonattan Reales & Jhoan Castro & Daniel Romero & Sandra Rodriguez A. & Daniel Rivera-Royero, 2022. "Immigrants resettlement in developing countries: A data-driven decision tool applied to the case of Venezuelan immigrants in Colombia," PLOS ONE, Public Library of Science, vol. 17(1), pages 1-16, January.
    3. Wiedner, Jonas & Schaeffer, Merlin, 2023. "The refugee mobility puzzle: Why do refugees move to cities with high unemployment rates once residence restrictions are lifted?," SocArXiv rnzbc, Center for Open Science.

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