The Effects of High-skilled Firm Entry on Incumbent Residents

Using 391 high-skilled firm entries in the U.S. from 1990–2010, we estimate the effects of the firmentry on incumbent residents’ consumption, finances, and mobility. We compare outcomes forresidents living close to the entry location with those living far away while controlling for theirproximity to potential high-skilled firm entry sites. We find high-skilled incumbents, especiallyhomeowners, benefit. Low-skilled incumbents on average benefit less. For a representative firmentry with 1000 new employees entering a metropolitan area with a population of 1.1 million,the aggregate welfare benefit across all incumbents is an annual equivalent of $25 million. Low-skilled renters living within 10 minutes from the entry bear the largest costs