IDEAS home Printed from https://ideas.repec.org/a/eee/regeco/v109y2024ics016604622400084x.html
   My bibliography  Save this article

The fiscal effects of immigration on local governments: Revisiting the Mariel Boatlift

Author

Listed:
  • Clair, Travis St.

Abstract

Immigration raises important political and economic questions, yet there remains considerable disagreement about its short- and long-term consequences. This paper examines the fiscal consequences of immigration for local governments. Previous work has highlighted the gap between the long-term economic benefits of immigration and the short-term fiscal burden posed by recent arrivals, however several influential estimates based on cash-flow accounting suffer from potential bias. I use a quasi-experimental approach to re-examine a famous case: the large wave of Cuban refugees that landed in Miami in 1980, otherwise known as the Mariel Boatlift. Using a synthetic control design, I find that per-pupil education costs increased in Miami in the aftermath of the Boatlift, financed by an increase in state transfers. These effects persisted for at least ten years. The results shed light on the heterogeneous impacts of immigration over time and space.

Suggested Citation

  • Clair, Travis St., 2024. "The fiscal effects of immigration on local governments: Revisiting the Mariel Boatlift," Regional Science and Urban Economics, Elsevier, vol. 109(C).
    • Handle: RePEc:eee:regeco:v:109:y:2024:i:c:s016604622400084x
    DOI: 10.1016/j.regsciurbeco.2024.104053
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S016604622400084X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.regsciurbeco.2024.104053?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gianmarco I. P. Ottaviano & Giovanni Peri, 2021. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 9, pages 245-290, World Scientific Publishing Co. Pte. Ltd..
    2. George J. Borjas, 2021. "The Wage Impact Of The Marielitos: A Reappraisal," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 12, pages 375-408, World Scientific Publishing Co. Pte. Ltd..
    3. Ran Abramitzky & Philipp Ager & Leah Platt Boustan & Elior Cohen & Casper W. Hansen, 2019. "The Effects of Immigration on the Economy: Lessons from the 1920s Border Closure," NBER Working Papers 26536, National Bureau of Economic Research, Inc.
    4. Pia M. Orrenius, 2017. "New Findings on the Fiscal Impact of Immigration in the United States," Working Papers 1704, Federal Reserve Bank of Dallas.
    5. David Card, 1990. "The Impact of the Mariel Boatlift on the Miami Labor Market," ILR Review, Cornell University, ILR School, vol. 43(2), pages 245-257, January.
    6. Eli Ben-Michael & Avi Feller & Jesse Rothstein, 2021. "The Augmented Synthetic Control Method," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 116(536), pages 1789-1803, October.
    7. Christoph Albert, 2021. "The Labor Market Impact of Immigration: Job Creation versus Job Competition," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(1), pages 35-78, January.
    8. Jennifer Hunt & Marjolaine Gauthier-Loiselle, 2010. "How Much Does Immigration Boost Innovation?," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(2), pages 31-56, April.
    9. Christian Dustmann & Uta Schönberg & Jan Stuhler, 2017. "Labor Supply Shocks, Native Wages, and the Adjustment of Local Employment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(1), pages 435-483.
    10. David Card, 2007. "How Immigration Affects U.S. Cities," RF Berlin - CReAM Discussion Paper Series 0711, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    11. Francine D. Blau & Jennifer Hunt, 2019. "The economic and fiscal consequences of immigration: highlights from the National Academies report," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 54(3), pages 173-176, July.
    12. Michael A. Clemens & Jennifer Hunt, 2019. "The Labor Market Effects of Refugee Waves: Reconciling Conflicting Results," ILR Review, Cornell University, ILR School, vol. 72(4), pages 818-857, August.
    13. Dmitry Arkhangelsky & Susan Athey & David A. Hirshberg & Guido W. Imbens & Stefan Wager, 2021. "Synthetic Difference-in-Differences," American Economic Review, American Economic Association, vol. 111(12), pages 4088-4118, December.
    14. Bruno Ferman & Cristine Pinto & Vitor Possebom, 2020. "Cherry Picking with Synthetic Controls," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(2), pages 510-532, March.
    15. Dorte Sindbjerg Martinsen & Gabriel Pons Rotger, 2017. "The fiscal impact of EU immigration on the tax-financed welfare state: Testing the ‘welfare burden’ thesis," European Union Politics, , vol. 18(4), pages 620-639, December.
    16. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    17. Anna Maria Mayda & Mine Z. Senses & Walter Steingress, 2023. "Immigration and Provision of Public Goods: Evidence at the Local Level in the U.S," Staff Working Papers 23-57, Bank of Canada.
    18. Michael A. Clemens, 2021. "The Fiscal Effect of Immigration: Reducing Bias in Influential Estimates," RF Berlin - CReAM Discussion Paper Series 2134, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    19. Christian Dustmann & Tommaso Frattini & Ian P. Preston, 2013. "The Effect of Immigration along the Distribution of Wages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(1), pages 145-173.
    20. Bernt Bratsberg & Oddbjørn Raaum & Knut Røed, 2010. "When Minority Labor Migrants Meet the Welfare State," Journal of Labor Economics, University of Chicago Press, vol. 28(3), pages 633-676, July.
    21. Jorgen Hansen & Magnus Lofstrom, 2003. "Immigrant Assimilation and Welfare Participation Do Immigrants Assimilate Into or Out of Welfare?," Journal of Human Resources, University of Wisconsin Press, vol. 38(1).
    22. Christian Dustmann & Tommaso Frattini, 2014. "The Fiscal Effects of Immigration to the UK," Economic Journal, Royal Economic Society, vol. 124(580), pages 593-643, November.
    23. Ashok Kaul & Stefan Klößner & Gregor Pfeifer & Manuel Schieler, 2022. "Standard Synthetic Control Methods: The Case of Using All Preintervention Outcomes Together With Covariates," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 40(3), pages 1362-1376, June.
    24. Joakim Ruist, 2014. "Free Immigration and Welfare Access: The Swedish Experience," Fiscal Studies, Institute for Fiscal Studies, vol. 35, pages 19-39, March.
    25. Eduardo Cavallo & Sebastian Galiani & Ilan Noy & Juan Pantano, 2013. "Catastrophic Natural Disasters and Economic Growth," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1549-1561, December.
    26. Bernt Bratsberg & Oddbjørn Raaum & Knut Røed, 2014. "Immigrants, Labour Market Performance and Social Insurance," Economic Journal, Royal Economic Society, vol. 124(580), pages 644-683, November.
    27. Giovanni Peri & Vasil Yasenov, 2019. "The Labor Market Effects of a Refugee Wave: Synthetic Control Method Meets the Mariel Boatlift," Journal of Human Resources, University of Wisconsin Press, vol. 54(2), pages 267-309.
    28. Gaetano Basso & Giovanni Peri, 2020. "Internal Mobility: The Greater Responsiveness of Foreign-Born to Economic Conditions," Journal of Economic Perspectives, American Economic Association, vol. 34(3), pages 77-98, Summer.
    29. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    30. Jordi Jofre-Monseny & Pilar Sorribas-Navarro & Javier Vázquez-Grenno, 2016. "Immigration and local spending in social services: evidence from a massive immigration wave," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(6), pages 1004-1029, December.
    31. Alberto Abadie & Alexis Diamond & Jens Hainmueller, 2015. "Comparative Politics and the Synthetic Control Method," American Journal of Political Science, John Wiley & Sons, vol. 59(2), pages 495-510, February.
    32. Sebastian Galiani & Brian Quistorff, 2017. "The synth runner package: Utilities to automate synthetic control estimation using synth," Stata Journal, StataCorp LLC, vol. 17(4), pages 834-849, December.
    33. Xavier Chojnicki, 2013. "The Fiscal Impact of Immigration in France: A Generational Accounting Approach," The World Economy, Wiley Blackwell, vol. 36(8), pages 1065-1090, August.
    34. L. Jason Anastasopoulos & George J. Borjas & Gavin G. Cook & Michael Lachanski, 2021. "Job Vacancies and Immigration: Evidence from the Mariel Supply Shock," Journal of Human Capital, University of Chicago Press, vol. 15(1), pages 1-33.
    35. Stansel, Dean, 2019. "Economic Freedom in U.S. Metropolitan Areas," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 49(01), March.
    36. Alberto Abadie, 2021. "Using Synthetic Controls: Feasibility, Data Requirements, and Methodological Aspects," Journal of Economic Literature, American Economic Association, vol. 59(2), pages 391-425, June.
    37. Lili Yao & J. Brandon Bolen & Claudia R. Williamson, 2022. "Are economic arguments against immigration missing the boat? The fiscal effects of the Mariel Boatlift," Southern Economic Journal, John Wiley & Sons, vol. 89(2), pages 305-325, October.
    38. Sharpe, Jamie, 2019. "Re-evaluating the impact of immigration on the U.S. rental housing market," Journal of Urban Economics, Elsevier, vol. 111(C), pages 14-34.
    39. Alberto Abadie & Jérémy L’Hour, 2021. "A Penalized Synthetic Control Estimator for Disaggregated Data," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 116(536), pages 1817-1834, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anthony Edo & Lionel Ragot & Hillel Rapoport & Sulin Sardoschau & Andreas Steinmayr & Arthur Sweetman, 2020. "An introduction to the economics of immigration in OECD countries," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(4), pages 1365-1403, November.
    2. Tomasz Serwach, 2023. "The European Union and within‐country income inequalities. The case of the new member states," The World Economy, Wiley Blackwell, vol. 46(7), pages 1890-1939, July.
    3. Tomasz Serwach, 2022. "The European Union and within-country income inequalities. The case of the New Member States," Working Papers hal-03548416, HAL.
    4. Anthony Edo & Lionel Ragot & Hillel Rapoport & Sulin Sardoschau & Andreas Steinmayr, 2018. "The Effects of Immigration in Developed Countries: Insights from Recent Economic Research," CEPII Policy Brief 2018-22, CEPII research center.
    5. David Gilchrist & Thomas Emery & Nuno Garoupa & Rok Spruk, 2023. "Synthetic Control Method: A tool for comparative case studies in economic history," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 409-445, April.
    6. Nuno Garoupa & Rok Spruk, 2024. "Populist Constitutional Backsliding and Judicial Independence: Evidence from Turkiye," Papers 2410.02439, arXiv.org.
    7. Maximiliano Marzetti & Rok Spruk, 2023. "Long-Term Economic Effects of Populist Legal Reforms: Evidence from Argentina," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 65(1), pages 60-95, March.
    8. Giovanni Peri & Derek Rury & Justin C. Wiltshire, 2024. "The Economic Impact of Migrants from Hurricane Maria," Journal of Human Resources, University of Wisconsin Press, vol. 59(6), pages 1795-1829.
    9. Roy Cerqueti & Raffaella Coppier & Alessandro Girardi & Marco Ventura, 2022. "The sooner the better: lives saved by the lockdown during the COVID-19 outbreak. The case of Italy," The Econometrics Journal, Royal Economic Society, vol. 25(1), pages 46-70.
    10. repec:diw:diwwpp:dp2041 is not listed on IDEAS
    11. Pier Basaglia & Sophie M. Behr & Moritz A. Drupp & Piero Basaglia, 2023. "De-Fueling Externalities: Causal Effects of Fuel Taxation and Mediating Mechanisms for Reducing Climate and Pollution Costs," CESifo Working Paper Series 10508, CESifo.
    12. Lili Yao & J. Brandon Bolen & Claudia R. Williamson, 2022. "Are economic arguments against immigration missing the boat? The fiscal effects of the Mariel Boatlift," Southern Economic Journal, John Wiley & Sons, vol. 89(2), pages 305-325, October.
    13. Billy, Alexander & Packard, Michael, 2022. "Crime and the Mariel Boatlift," International Review of Law and Economics, Elsevier, vol. 72(C).
    14. Cummins Joseph & Miller Douglas L. & Smith Brock & Simon David, 2024. "Matching on Noise: Finite Sample Bias in the Synthetic Control Estimator," Journal of Econometric Methods, De Gruyter, vol. 13(1), pages 67-95, January.
    15. repec:osf:osfxxx:s8ayp_v1 is not listed on IDEAS
    16. Pekka Malo & Juha Eskelinen & Xun Zhou & Timo Kuosmanen, 2024. "Computing Synthetic Controls Using Bilevel Optimization," Computational Economics, Springer;Society for Computational Economics, vol. 64(2), pages 1113-1136, August.
    17. Michael Funke & Kadri Männasoo & Helery Tasane, 2023. "Regional Economic Impacts of the Øresund Cross-Border Fixed Link: Cui Bono?," CESifo Working Paper Series 10557, CESifo.
    18. Justin C. Wiltshire, 2023. "Walmart Supercenters and Monopsony Power: How A Large, Low-Wage Employer Impacts Local Labor Markets," Department Discussion Papers 2304, Department of Economics, University of Victoria.
    19. Rodríguez-Puello, Gabriel, 2024. "Digging for Trouble? Uncovering the Link Between Mining Booms and Crime," OSF Preprints s8ayp, Center for Open Science.
    20. Aleksandar Keseljevic & Stefan Nikolic & Rok Spruk, 2025. "Ethnic Conflicts, Civil War and Economic Growth: Region-Level Evidence from former Yugoslavia," Papers 2505.02431, arXiv.org.
    21. Christian Gunadi, 2021. "The Labour Market Effects of Venezuelan Refugee Crisis in the United States," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 83(6), pages 1311-1340, December.
    22. Nathan, Max & Overman, Henry & Riom, Capucine & Sanchez-Vidal, Maria, 2024. "Multipliers from a Major Public Sector Relocation: The BBC Moves to Salford," IZA Discussion Papers 17337, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    Immigration; Public finance; Synthetic control;
    All these keywords.

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:regeco:v:109:y:2024:i:c:s016604622400084x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/regec .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.