Working Paper: NBER ID: w25074
Authors: Andri Chassamboulli; Giovanni Peri
Abstract: In this paper we analyze the economic effects of different immigration policies using a model that incorporates economic and policy features crucial to understanding the migrant flows into the US. We differentiate among the most relevant channels of immigration to the US: family-based, employment-based and undocumented. Moreover we explicitly account for earning incentives to migrate and for the role of immigrant networks in generating immigration opportunities. Hence, we can analyze the effect of policy changes through those channels. In our simulations highly skilled employment and unskilled immigrants generate larger surplus to US firms than natives do. Hence policies restricting their entry either directly or indirectly have a depressing effect on job creation and, in turn, on native labor markets. Our analysis gives new insights into the effect of policies as it accounts for the endogenous immigration response which is overlooked by most existing models.
Keywords: Immigration Policies; Labor Markets; Economic Effects
JEL Codes: E24; F22; J64
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Highly skilled employment immigrants (J61) | Larger surplus for US firms (F12) |
| Unskilled immigrants (K37) | Larger surplus for US firms (F12) |
| Policies restricting entry of highly skilled immigrants (J68) | Negative impact on job creation (F66) |
| Policies restricting entry of unskilled immigrants (J68) | Negative impact on job creation (F66) |
| Unskilled family and undocumented immigrants (J69) | Large surplus due to lower wages relative to productivity (J39) |
| High-skilled immigrants (J61) | Increased firm surplus from employment matches (J68) |
| Changes in immigration laws (K37) | Unintended long-term effects on future immigration opportunities (K37) |
| Balanced immigration policies (J68) | Benefits for native groups in terms of unemployment and wages (J68) |