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The Effects of Immigration on the Economy: Lessons from the 1920s Border Closure

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  • Abramitzky, Ran
  • Ager, Philipp
  • Boustan, Leah
  • Cohen, Elior David
  • Hansen, Casper Worm

Abstract

In the 1920s, the United States substantially reduced immigrant entry by imposing country-specific quotas. We compare local labor markets with more or less exposure to the national quotas due to differences in initial immigrant settlement. A puzzle emerges: the earnings of existing US-born workers decline after the border closure, despite the loss of immigrant labor supply. We find that more skilled US-born workers - along with unrestricted immigrants from Mexico and Canada - move into affected urban areas, completely replacing European immigrants. By contrast, the loss of immigrant workers encouraged farmers to shift toward capital-intensive agriculture and discourage entry from unrestricted workers.

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  • Abramitzky, Ran & Ager, Philipp & Boustan, Leah & Cohen, Elior David & Hansen, Casper Worm, 2019. "The Effects of Immigration on the Economy: Lessons from the 1920s Border Closure," CEPR Discussion Papers 14165, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:14165
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    Cited by:

    1. Francesco Campo & Mariapia Mendola & Andrea Morrison & Gianmarco Ottaviano, "undated". "Immigrant Inventors and Diversity in the Age of Mass Migration," Development Working Papers 464, Centro Studi Luca d'Agliano, University of Milano.
    2. Giuliano, Paola & Tabellini, Marco, 2020. "The Seeds of Ideology: Historical Immigration and Political Preferences in the United States," IZA Discussion Papers 13268, Institute of Labor Economics (IZA).
    3. Escamilla-Guerrero, David & Kosack, Edward & Ward, Zachary, 2021. "Life after crossing the border: Assimilation during the first Mexican mass migration," Explorations in Economic History, Elsevier, vol. 82(C).
    4. Joseph Price & Christian vom Lehn & Riley Wilson, 2020. "The Winners and Losers of Immigration: Evidence from Linked Historical Data," NBER Working Papers 27156, National Bureau of Economic Research, Inc.
    5. Amior, Michael, 2020. "Immigration, local crowd-out and undercoverage bias," LSE Research Online Documents on Economics 108490, London School of Economics and Political Science, LSE Library.
    6. Gagliarducci, Stefano & Tabellini, Marco, 2021. "Faith and Assimilation: Italian Immigrants in the US," IZA Discussion Papers 14567, Institute of Labor Economics (IZA).
    7. Philipp Ager & James J. Feigenbaum & Casper Worm Hansen & Hui Ren Tan, 2020. "How the Other Half Died: Immigration and Mortality in US Cities," NBER Working Papers 27480, National Bureau of Economic Research, Inc.
    8. Fouka, Vasiliki & Mazumder, Soumyajit & Tabellini, Marco, 2021. "From Immigrants to Americans: Race and Assimilation during the Great Migration," IZA Discussion Papers 14371, Institute of Labor Economics (IZA).
    9. Francesco Campo & Mariapia Mendola & Andrea Morrison & Gianmarco Ottaviano, "undated". "Immigrant Inventors and Diversity in the Age of Mass Migration," Development Working Papers 464, Centro Studi Luca d'Agliano, University of Milano.
    10. Alesina, Alberto F & Tabellini, Marco, 2020. "The Political Effects of Immigration: Culture or Economics?," CEPR Discussion Papers 15486, C.E.P.R. Discussion Papers.
    11. Mariani, Rama Dasi & Rosati, Furio C., 2021. "Immigrant Supply of Marketable Child Care and Native Fertility in Italy," IZA Discussion Papers 14750, Institute of Labor Economics (IZA).
    12. Michael A. Clemens, 2021. "The Fiscal Effect of Immigration: Reducing Bias in Influential Estimates," CReAM Discussion Paper Series 2134, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    13. Franck, Raphaël, 2022. "Labor Scarcity, Technology Adoption and Innovation: Evidence from the Cholera Pandemics in 19th Century France," CEPR Discussion Papers 16928, C.E.P.R. Discussion Papers.
    14. Chen, Shuo & Xie, Bin, 2020. "Institutional Discrimination and Assimilation: Evidence from the Chinese Exclusion Act of 1882," IZA Discussion Papers 13647, Institute of Labor Economics (IZA).
    15. Eriksson, Katherine & Ward, Zachary, 2022. "Immigrants and cities during the age of mass migration," Regional Science and Urban Economics, Elsevier, vol. 94(C).
    16. David Escamilla-Guerrero & Moramay Lopez-Alonso, 2020. "Migrant self-selection in the presence of random shocks. Evidence from the Panic of 1907," Oxford Economic and Social History Working Papers _179, University of Oxford, Department of Economics.

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    More about this item

    Keywords

    Immigration Restrictions; labor mobility; Local Labor Markets;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General
    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-

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