Economic Consequences of Immigration Policy
Sunday, Jan. 5, 2020 10:15 AM - 12:15 PM (PDT)
- Chair: Andrea Velasquez, University of Colorado-Denver
The Rise and Fall of the Know-Nothing Party
AbstractThe Know-Nothing Party was the first major populist political party in U.S. History. It swept to power in 1854, running on a staunchly anti-immigrant and anti-Catholic platform; the party lost power in 1857 following the establishment of the new Republican party. In this paper, we examine economic factors which led to the rise and fall of the Know-Nothings in Massachusetts, separating the role of Irish labor market crowd- out, the movement of production into factories, and the effect of the general economic downturn of 1853-1854. Evidence suggests that labor market competition and industrialization positively predict the rise of the party; by the time the party lost power, other factors are more important in predicting electoral outcomes.
How Do Restrictions on High-Skilled Immigration Affect Offshoring? Evidence from the H-1B Program
AbstractThe decision to encourage or restrict high-skilled immigration has long been controversial. Advocates argue that high-skilled immigration is critical for firm competitiveness and innovation; critics argue that skilled immigrants displace native workers and drive down wages. The debate, however, has largely overlooked the secondary consequences of restrictions on high-skilled hiring of immigrants: multinational firms faced with decreased access to visas for skilled workers have an offshoring option, namely, hiring the foreign labor they need at their foreign affiliates. This paper documents the impact of restrictive high-skilled immigration policies on the globalization of high-skilled activity by US MNCs. I use a unique matched firm-level dataset of H-1B visas and multinational firm activity and two different identification strategies to examine three key questions about that impact. First, do restrictions on H-1B visas result in increased foreign affiliate activity? Second, how does any impact differ across firms, industries, and countries? Finally, do these restrictions also affect the location of innovative activity? Both strategies yield the same result: that restrictions on H-1B immigration caused increases in foreign affiliate activity at both the intensive (US multinationals employed more people at their foreign affiliates) and the extensive (US multinationals opened more foreign affiliates conducting R&D) margins. The effects are concentrated among highly H-1B-dependent firms and R&D-intensive firms operating in offshorable services sectors. Restrictions also caused increases in foreign R&D and foreign patenting, suggesting that there was also a change in the location of innovative activity.
The Labor Market Effects of Immigration Enforcement
AbstractWe examine the labor market effects of Secure Communities (SC)--an immigration enforcement policy which led to over 454,000 deportations between 2008-2015. Using a difference-in-differences model that takes advantage of the staggered rollout of SC, we find that SC significantly decreased the employment share of likely undocumented male immigrants. Importantly, the policy also led to a decrease in the employment rate of citizens. The employment effects are concentrated among male citizens working in higher-skilled occupations, particularly in sectors that traditionally rely on likely undocumented workers. This is consistent with complementarities in production between low-skilled immigrants and higher-skilled citizens.
- J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers
- J2 - Demand and Supply of Labor