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Closing the Border: The Impact of U.S. Migration and Trade Policy

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  • Cruz, José-Luis
  • Di Giovanni, Julian

Abstract

This paper quantifies the impact of recent U.S. migration policy on the aggregate economy and state-level outcomes using a general equilibrium trade model with heterogeneous firms and imperfect substitution between natives and immigrants. The analysis incorporates data on migration by legal status, skill composition, trade flows, and firm heterogeneity. Repatriating undocumented immigrants reduces U.S. GDP by 5.46% and natives’ welfare by 2.46%, while repatriating temporary visa holders results in declines of 1.50% and 0.66%, respectively. Regional effects vary, reflecting differences in states’ immigrant-to-population shares. Model-implied welfare losses from repatriating undocumented immigrants are almost twice that of recent tariff increases.

Suggested Citation

  • Cruz, José-Luis & Di Giovanni, Julian, 2025. "Closing the Border: The Impact of U.S. Migration and Trade Policy," CEPR Discussion Papers 20949, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:20949
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    File URL: https://cepr.org/publications/DP20949
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    Keywords

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    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances

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