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Immigration Linked to Rural Economic Gains

Monday, 20 April 2015

A new Daily Yonder study shows that rural counties with more immigrants also tend to be performing better economically. Rural America’s foreign-born residents may be moving to counties that have more jobs, but immigrants also create more economic opportunity when they get there, economists say.

Per capita market income grew slowly but steadily in nonmetropolitan counties as the percentage of foreign-born residents increased. The relative size of the foreign-born population is grouped into five sets or quintiles, with 1 having the smallest percentage of immigrants and 5 having the most. The chart also shows the two types of nonmetropolitan counties – micropolitan (counties with cities of 10,000 to 49,999 residents) and noncore (counties with no city of 10,000 or more). Both types of nonmetropolitan counties saw an increase in income as the percentage of immigrants increased.

For many rural counties, having more immigrants also goes along with having a better local economy, according to a new study commissioned by the Daily Yonder.

“The results of this study contradict common perceptions regarding immigrants,” said Roberto Gallardo, Ph.D., the author of the study “We frequently hear that immigrants are a drain on the economy and resources. But this data shows a very different picture.”

Gallardo looked at the percentage of a rural county’s population that was born beyond U.S. borders and correlated that information with some basic economic data. He found that, in general, as the proportion of the immigrant population grows in rural areas, positive economic indicators like per capita market income rise, as well. And negative economic indicators like the rate of poverty and unemployment go down.

Gallardo, whose academic focus is community economic development, is an adviser to the Daily Yonder, the author of numerous Daily Yonder articles, and an associate extension professor at Mississippi State University.

The study used data from the 2012 five-year American Community Survey, combined with data from the Bureau of Economic Analysis and the Bureau of Labor Statistics. (The ACS data does contain margins of error that need to be considered when interpreting the results, Gallardo said.)

The study split rural counties into five groups (or quintiles) based on the percentage of population that was born outside the United States in 2012. The counties with the lowest percentage of residents born outside the U.S. were in quintile one. These low-immigrant population counties had an average of less than 1 percent of residents who were born outside the United States. In quintile five, on the other end of the spectrum, the average size of foreign-born population was 8.9 percent.

The general pattern of more immigrants equaling better economic performance is reflected in per capita market income (shown in the chart at the top of this story), Gallardo said. Counties with the smallest percentage of immigrants had a per capita market income of $23,326. That figure grew steadily and peaked for counties in the “most-immigrants” category. For those counties, the per capita market income was 27 percent higher, or $29,538.

Similarly, for nonmetropolitan counties, the poverty rate fell from 20.9 percent in counties with the smallest proportion of immigrants to 17.6 percent in counties with the largest proportion.

The percentage of population living in poverty tended to be less in counties with a greater percentage of foreign-born residents in the population. The change was more pronounced for the smallest counties, which have no cities of 10,000 or greater (shown in the red columns).

And unemployment was 0.8 percentage points lower in high-immigrant, nonmetropolitan counties – 7.9 vs. 8.7 percent, using 2012 data (see chart below).

The study did not differentiate among different types of immigrants – naturalized citizens, people with other legal status such as a work permit, or immigrants who were in the United States without permission. And it did not consider other demographic information such as immigrants’ birth places.

Gallardo said the study does not prove immigrants are directly causing better economic performance. But there is an obvious connection, he said.

Unemployment dropped by nearly a point as the proportion of immigrants increased in noncore counties. The micropolitan rate dropped by 0.7 points.

“It’s important to mention that this relationship could be backwards,” he said. “In other words, immigrants may be attracted to already prosperous communities. Whichever it is though, the results are very interesting.”

Another scholar said it’s likely that immigrants are both responding to and affecting local economic conditions.

“Immigrants are moving to areas that are economically vital,” said Dan Lichter, Ph.D., director of the Cornell University Population Center. “They move there because there are jobs, and because they go there, it creates employment opportunities for others. They buy things, they use services, they need housing, they are consumers, and that’s good for local economies.”

But immigrant communities can also create challenges for rural communities, Lichter said. New arrivals are at greater risk of living in poverty and have less education than the native-born population.

“The question is, are we willing to invest in those immigrant families?” he said. “Are we going to invest in schools, services and the other things that are going to make it possible for these young people to be successful?”

The immigrant population has helped offset some of the population loss in rural counties over the past four years, said James H. Johnson Jr., a University of North Carolina business professor who has studied the economic impact of immigration in several Southern states.

“If you looked at rural counties and took out the gains in immigrant populations, you would have far more communities losing population than we do now,” he said. “They are going to save a lot of those counties.”

Immigrants also likely to have some unique, positive characteristics, Johnson said.

“What people don’t understand is that immigration is a selective process,” he said. “They are different.”

Immigrants tend to be younger and healthier than the general population, he said.

“They are risk takers by definition. For them, the glass is always half full.”

Source: The Daily Yonder

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