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The Economic Effect of Immigration Policies: Analyzing and Simulating the U.S. Case

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  • Andri Chassamboulli
  • Giovanni Peri

Abstract

In this paper we analyze the economic effects of different immigration policies in a model capturing economic and institutional features crucial to understand the migrant flows into the US. We explicitly 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 job-related and family-related immigration opportunities. Hence, we can analyze the effect of policy changes through those channels. We find that all types of immigrants generate larger surplus to US firms than natives do. Restricting their entry has a depressing effect on job creation and, in turn, on native labor markets. We also show that substituting family-based entry with employment-based entry, and maintaining the total inflow of immigrants unchanged, produces a stimulus to job creation and native earnings.

Suggested Citation

  • Andri Chassamboulli & Giovanni Peri, 2019. "The Economic Effect of Immigration Policies: Analyzing and Simulating the U.S. Case," University of Cyprus Working Papers in Economics 06-2019, University of Cyprus Department of Economics.
    • Handle: RePEc:ucy:cypeua:06-2019
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    Cited by:

    1. Battaglia, Emily, 2023. "Did DACA Harm US-Born Workers? Temporary Work Visas and Labor Market Competition," Journal of Urban Economics, Elsevier, vol. 134(C).
    2. Di Iasio, Valentina & Wahba, Jackline, 2023. "Expecting Brexit and UK migration: Should I go?," European Economic Review, Elsevier, vol. 157(C).
    3. Andri Chassamboulli & Xiangbo Liu, 2020. "Immigration, Legal Status and Fiscal Impact," University of Cyprus Working Papers in Economics 07-2020, University of Cyprus Department of Economics.
    4. Almarina Gramozi & Theodore Palivos & Marios Zachariadis, 2020. "On the Degree and Consequences of Talent Misallocation for the United States," University of Cyprus Working Papers in Economics 09-2020, University of Cyprus Department of Economics.
    5. Mariele Macaluso, 2022. "The influence of skill-based policies on the immigrant selection process," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(2), pages 595-621, July.
    6. Andreas Beerli & Jan Ruffner & Michael Siegenthaler & Giovanni Peri, 2021. "The Abolition of Immigration Restrictions and the Performance of Firms and Workers: Evidence from Switzerland," American Economic Review, American Economic Association, vol. 111(3), pages 976-1012, March.
    7. Chassamboulli, Andri & Fontaine, Idriss & Gálvez-Iniesta, Ismael & Gomes, Pedro, 2024. "Immigration and labour market flows," Labour Economics, Elsevier, vol. 86(C).
    8. Almarina Gramozi & Theodore Palivos & Marios Zachariadis, 2023. "Measuring the welfare costs of racial discrimination in the labor market," Economic Inquiry, Western Economic Association International, vol. 61(2), pages 232-252, April.
    9. Oswald-Egg, Maria Esther & Siegenthaler, Michael, 2023. "Train Drain? Access to Foreign Workers and Firms' Provision of Training," IZA Discussion Papers 15902, Institute of Labor Economics (IZA).
    10. Maria Esther Oswald-Egg & Michael Siegenthaler, 2021. "Train drain? Access to skilled foreign workers and firms' provision of training," KOF Working papers 21-495, KOF Swiss Economic Institute, ETH Zurich.
    11. Maria Esther Oswald-Egg & Michael Siegenthaler, 2021. "Train drain? Access to skilled foreign workers and firms' provision of training," Economics of Education Working Paper Series 0186, University of Zurich, Department of Business Administration (IBW).
    12. Giacomo Caracciolo & Salvatore Lo Bello & Dario Pellegrino, 2021. "An assessment on the potential impact of COVID-19 on the Italian demographic structure," Questioni di Economia e Finanza (Occasional Papers) 622, Bank of Italy, Economic Research and International Relations Area.
    13. Sargent, Kristina, 2023. "The labor market impacts of Brexit: Migration and the European union," Economic Modelling, Elsevier, vol. 121(C).

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    More about this item

    Keywords

    Immigration; Networks; Job creation; Unemployment; Wages;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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