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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 in a model capturing economic and institutional features crucial to understand the migrant flows into the US. We explicitly 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 job-related and family-related immigration opportunities. Hence, we can analyze the effect of policy changes through those channels. We find that all types of immigrants generate larger surplus to US firms than natives do. Restricting their entry has a depressing effect on job creation and, in turn, on native labor markets. We also show that substituting family-based entry with employment-based entry, and maintaining the total inflow of immigrants unchanged, produces a stimulus to job creation and native earnings.

Suggested Citation

  • Andri Chassamboulli & Giovanni Peri, 2019. "The Economic Effect of Immigration Policies: Analyzing and Simulating the U.S. Case," University of Cyprus Working Papers in Economics 06-2019, University of Cyprus Department of Economics.
  • Handle: RePEc:ucy:cypeua:06-2019
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    File URL: http://papers.econ.ucy.ac.cy/RePEc/papers/06-19.pdf
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    References listed on IDEAS

    as
    1. Jennifer Hunt, 2011. "Which Immigrants Are Most Innovative and Entrepreneurial? Distinctions by Entry Visa," Journal of Labor Economics, University of Chicago Press, vol. 29(3), pages 417-457.
    2. Andri Chassamboulli & Theodore Palivos, 2014. "A Search‐Equilibrium Approach To The Effects Of Immigration On Labor Market Outcomes," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55, pages 111-129, February.
    3. Horváth, Gergely, 2014. "Occupational mismatch and social networks," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 442-468.
    4. Gaetano Basso & Giovanni Peri & Ahmed Rahman, 2017. "Computerization and Immigration: Theory and Evidence from the United States," NBER Working Papers 23935, National Bureau of Economic Research, Inc.
    5. 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.
    6. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
    7. Pope, Nolan G., 2016. "The Effects of DACAmentation: The Impact of Deferred Action for Childhood Arrivals on Unauthorized Immigrants," Journal of Public Economics, Elsevier, vol. 143(C), pages 98-114.
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    More about this item

    Keywords

    Immigration; Networks; Job creation; Unemployment; Wages;

    JEL classification:

    • 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
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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