Title

The Effects of Immigration on the Economy: Lessons from the 1920s Border Closure

Author(s)

Ran Abramitzky Ran Abramitzky (Stanford University)

Philipp Ager Philipp Ager (University of Southern Denmark)

Leah Platt Boustan Leah Boustan (Princeton University)

Elior Cohen Elior Cohen (University of California, Los Angeles)

Casper W. Hansen Casper Hansen (University of Copenhagen)

Abstract

In the 1920s, the United States substantially reduced immigrant entry by imposing country specific quotas. We compare local labor markets with more or less exposure to the national quotas due to differences in initial immigrant settlement. A puzzle emerges: the earnings of existing US-born workers declined after the border closure, despite the loss of immigrant labor supply. We find that more skilled US-born workers – along with unrestricted immigrants from Mexico and Canada – moved into affected urban areas, completely replacing European immigrants. By contrast, the loss of immigrant workers encouraged farmers to shift toward capital-intensive agriculture and discouraged entry from unrestricted workers.

Creation Date

2019-12

Section URL ID

Paper Number

2019-2

URL

https://scholar.princeton.edu/sites/default/files/lboustan/files/w26536.pdf

File Function

Jel

J6,J61,N21

Keyword(s)

Immigration Restrictions, labor mobility, Local Labor Markets

Suppress

false

Series

13