Working Paper: NBER ID: w23753
Authors: Gordon Hanson; Chen Liu; Craig McIntosh
Abstract: From the 1970s to the early 2000s, the United States experienced an epochal wave of low-skilled immigration. Since the Great Recession, however, U.S. borders have become a far less active place when it comes to the net arrival of foreign workers. The number of undocumented immigrants has declined in absolute terms, while the overall population of low-skilled, foreign-born workers has remained stable. We examine how the scale and composition of low-skilled immigration in the United States have evolved over time, and how relative income growth and demographic shifts in the Western Hemisphere have contributed to the recent immigration slowdown. Because major source countries for U.S. immigration are now seeing and will continue to see weak growth of the labor supply relative to the United States, future immigration rates of young, low-skilled workers appear unlikely to rebound, whether or not U.S. immigration policies tighten further.
Keywords: low-skilled immigration; US immigration policy; labor market dynamics
JEL Codes: J11; J15; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| decline in low-skilled immigration (K37) | changes in income growth (O49) |
| decline in low-skilled immigration (K37) | demographic shifts in source countries (J11) |
| demographic shifts in source countries (J11) | decline in low-skilled immigration (K37) |
| reduced opportunities in U.S. labor market (F66) | decline in undocumented immigration (K37) |
| demographic shifts in source countries (J11) | reduction in flow of young low-skilled workers to the U.S. (F66) |
| increased border patrol and interior enforcement (F55) | deter potential migrants (F22) |
| increased border patrol and interior enforcement (F55) | reduced existing undocumented population (J11) |
| slowdown in low-skilled immigration (K37) | implications for wage pressures in the U.S. labor market (F66) |
| if immigration had continued at previous rates (J11) | wage gaps between skilled and unskilled labor would have been larger (F66) |