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

NBER Working Paper No. 25074

Issued in September 2018, Revised in October 2019

NBER Program(s):Economic Fluctuations and Growth, Labor Studies



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.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w25074

Published: Andri Chassamboulli & Giovanni Peri, 2020. "The economic effect of immigration policies: analyzing and simulating the U.S. case," Journal of Economic Dynamics and Control, vol 114. citation courtesy of