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Immigration Restrictions as Active Labor Market Policy: Evidence from the Mexican Bracero Exclusion - Working Paper 451

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  • Michael Clemens, Ethan Lewis, Hannah Postel

Abstract

An important class of active labor market policy has received little rigorous impact evaluation: immigration barriers intended to improve the terms of employment for domestic workers by deliberately shrinking the workforce. Recent advances in the theory of endogenous technical change suggest that such policies could have limited or even perverse labor market effects, but empirical tests are scarce. We study a natural experiment that excluded almost half a million Mexican ‘bracero’ seasonal agricultural workers from the United States, with the stated goal of raising wages and employment for domestic farm workers. We build a simple model to clarify how the labor market effects of bracero exclusion depend on assumptions about production technology, and test it by collecting novel archival data on the bracero program that allow us to measure state-level exposure to exclusion for the first time. We reject the wage effect of bracero exclusion required by the model in the absence of induced technical change, and fail to reject the hypothesis that exclusion had no eect on US agricultural wages or employment. Important mechanisms for this result include both adoption of less labor-intensive technologies and shifts in crop mix.

Suggested Citation

  • Michael Clemens, Ethan Lewis, Hannah Postel, 2017. "Immigration Restrictions as Active Labor Market Policy: Evidence from the Mexican Bracero Exclusion - Working Paper 451," Working Papers 451, Center for Global Development.
  • Handle: RePEc:cgd:wpaper:451
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    File URL: https://www.cgdev.org/publication/immigration-restrictions-active-labor-market-policy-evidence-mexican-bracero-exclusion
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    Cited by:

    1. Andri Chassamboulli & Giovanni Peri, 2018. "The Economic Effect of Immigration Policies: Analyzing and Simulating the U.S. Case," NBER Working Papers 25074, National Bureau of Economic Research, Inc.
    2. Ager, Philipp & Hansen, Casper Worm, 2017. "Closing Heaven's Door: Evidence from the 1920s U.S. Immigration Quota Acts," Discussion Papers of Business and Economics 11/2017, University of Southern Denmark, Department of Business and Economics.
    3. Xie, Bin, 2017. "The Effects of Immigration Quotas on Wages, the Great Black Migration, and Industrial Development," IZA Discussion Papers 11214, Institute of Labor Economics (IZA).
    4. repec:eee:regeco:v:67:y:2017:i:c:p:119-134 is not listed on IDEAS
    5. Edwards, Ryan & Ortega, Francesc, 2017. "The economic contribution of unauthorized workers: An industry analysis," Regional Science and Urban Economics, Elsevier, vol. 67(C), pages 119-134.
    6. Teresa C. Fort & Justin R. Pierce & Peter K. Schott, 2018. "New Perspectives on the Decline of US Manufacturing Employment," Journal of Economic Perspectives, American Economic Association, vol. 32(2), pages 47-72, Spring.

    More about this item

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • 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

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