2021 Honors Thesis: Xinyue Qin

Name:

Xinyue Qin

Title of Thesis:

The Impact of Immigration on U.S. Trade Deficit and Immigrants' Home Bias Effect

Committee:

Jong H. Kim, Sue Mialon, Maria Franca Sibau (East Asian Studies)

Abstract:

This paper investigates the impact of immigration on the United States trade deficit. Immigrants influence bilateral trade through two hypothesized channels — the network effect and the home bias effects. The latter only foster imports and can potentially aggravate the U.S. trade deficit. By applying panel data for the U.S. and 20 trading partners spanning the years 1986 to 2018 to a gravity model of international trade, the paper reports a significantly positive impact of immigration on the U.S. deficit against immigrant source countries. On average, a 10 percent increase in the immigration stock is estimated to increase the deficit by $787 million annually. The results indicate a home bias effect operating in the U.S. international trade relations.