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The Economic Effect of Immigration Policies: Analyzing and Simulating the U.S. Case

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  • Andri Chassamboulli
  • Giovanni Peri

Abstract

In this paper we analyze the economic effects of different immigration policies using a model that incorporates economic and policy features crucial to understanding the migrant flows into the US. We differentiate among the most relevant channels of immigration to the US: family-based, employment-based and undocumented. Moreover we explicitly account for earning incentives to migrate and for the role of immigrant networks in generating immigration opportunities. Hence, we can analyze the effect of policy changes through those channels. In our simulations highly skilled employment and unskilled immigrants generate larger surplus to US firms than natives do. Hence policies restricting their entry either directly or indirectly have a depressing effect on job creation and, in turn, on native labor markets. Our analysis gives new insights into the effect of policies as it accounts for the endogenous immigration response which is overlooked by most existing models.

Suggested Citation

  • 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.
  • Handle: RePEc:nbr:nberwo:25074
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    Cited by:

    1. Andri Chassamboulli & Xiangbo Liu, 2020. "Immigration, Legal Status and Fiscal Impact," University of Cyprus Working Papers in Economics 07-2020, University of Cyprus Department of Economics.
    2. Almarina Gramozi & Theodore Palivos & Marios Zachariadis, 2020. "On the Degree and Consequences of Talent Misallocation for the United States," University of Cyprus Working Papers in Economics 09-2020, University of Cyprus Department of Economics.

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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