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Should the U.S. Have Locked the Heaven's Door? Reassessing the Benefits of the Postwar Immigration

  • Chojnicki, Xavier

    ()

    (University of Lille 1)

  • Docquier, Frédéric

    ()

    (Université catholique de Louvain)

  • Ragot, Lionel

    ()

    (University of Lille 1)

This paper examines the economic impact of the second great immigration wave (1945-2000) on the US economy. Contrary to recent studies, we estimate that immigration induced important net gains and small redistributive effects among natives. Our analysis relies on a computable general equilibrium model combining the major interactions between immigrants and natives (labor market impact, fiscal impact, capital deepening, endogenous education, endogenous inequality). We use a backsolving method to calibrate the model on historical data and then consider two counterfactual variants: a cutoff of all immigration flows since 1950 and a stronger selection policy. According to our simulations, the postwar US immigration is beneficial for all cohorts and all skill groups. These gains are closely related to a long-run fiscal gain and a small labor market impact of immigrants. Finally, we also demonstrate that all generations would have benefited from a stronger selection of immigrants.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1676.

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Length: 33 pages
Date of creation: Jul 2005
Date of revision:
Publication status: published in: Journal of Population Economics, 2011, 24 (1), 317-359
Handle: RePEc:iza:izadps:dp1676
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  1. Holger Bonin & Bernd Raffelhüschen & Jan Walliser, 2000. "Can Immigration Alleviate the Demographic Burden?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 57(1), pages 1-, September.
  2. David, de la Croix & Frédéric Docquier, 2003. "Diverging patterns of education premium and school attendance in France and the US : a Walrasian view," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2003010, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  3. Alan J. Auerbach & Philip Oreopoulos, 2000. "The Fiscal Effects of U.S. Immigration: A Generational-Accounting Perspective," NBER Chapters, in: Tax Policy and the Economy, Volume 14, pages 123-156 National Bureau of Economic Research, Inc.
  4. Razin, Assaf & Sadka, Efraim, 1999. "Migration and pension with international capital mobility," Journal of Public Economics, Elsevier, vol. 74(1), pages 141-150, October.
  5. Timothy Miller & Ronald Lee, 2000. "Immigration, Social Security, and Broader Fiscal Impacts," American Economic Review, American Economic Association, vol. 90(2), pages 350-354, May.
  6. Hans Fehr & Sabine Jokisch & Laurence Kotlikoff, 2004. "The Role of Immigration in Dealing with the Developed World's Demographic Transition," NBER Working Papers 10512, National Bureau of Economic Research, Inc.
  7. Wasmer, Etienne, 2001. "Measuring human capital in the labor market: The supply of experience in 8 OECD countries," European Economic Review, Elsevier, vol. 45(4-6), pages 861-874, May.
  8. Borjas, George J, 1999. "Immigration and Welfare Magnets," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 607-37, October.
  9. Rachel M. Friedberg & Jennifer Hunt, 1995. "The Impact of Immigrants on Host Country Wages, Employment and Growth," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 23-44, Spring.
  10. Kjetil Storesletten, . "Sustaining Fiscal Policy Through Immigration," Homapage Papers _005, Stockholm University, Institute for International Economic Studies.
  11. Jagadeesh Gokhale & Benjamin R. Page & John Sturrock, 1999. "Generational Accounts for the United States: An Update," NBER Chapters, in: Generational Accounting around the World, pages 489-518 National Bureau of Economic Research, Inc.
  12. David Card & Thomas Lemieux, 2000. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," NBER Working Papers 7655, National Bureau of Economic Research, Inc.
  13. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
  14. George J. Borjas & Richard B. Friedman & Lawrence F. Katz, 1997. "How Much Do Immigration and Trade Affect Labor Market Outcomes?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1), pages 1-90.
  15. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352.
  16. Assaf Razin & Efraim Sadka, 2004. "Welfare Migration: Is the Net Fiscal Burden a Good Measure of Its Economic Impact on the Welfare of the Native Born Population?," NBER Working Papers 10682, National Bureau of Economic Research, Inc.
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