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Atlanta Marriott Marquis, A705
Hosted By:
American Economic Association
US-Mexico border. We apply a number of new datasets to study the effect of this fence
construction on migration and the labor market in both the U.S. and Mexico. We document that the construction of a fence: (i) reduced migration between aected
origin-destination pairs by 4%, (ii) reduced the stock of migrants in a US destination
region by 2% for every 100 origins aected by the fence, (iii) lead to an internal general
equilibrium response, with an inow of the stock of high-educated US-born workers
of 0.6% (0.1% for low-educated US-born workers), and (iv) lead to a decrease in the
wages of low-educated US-born workers of 0.7% and high-educated US-born workers of
0.5%, with no statistically signicant change to the wage of migrant workers. We then
develop a quantitative general equilibrium spatial model incorporating multiple types
of labor and the costly movement of goods and people across space. We show that this
model can match the above facts and estimate the model using the construction of the
border fence. Finally, we use the model to predict the effect of a proposed border fence
that spans the entire border.
were generally well below the levels in the existing member countries. Citizens of these newly admitted
countries were subsequently free to take jobs anywhere in the EU, and many did so. In
2015, a large number of refugees from Syria and other broken countries sought to migrate to EU
countries (along very dangerous routes), and these refugees were met with fierce resistance, at
least in some places. This paper seeks to understand the labor market implications of allowing
free migration across borders, with particular reference to the EU. The aim is to quantify the
migration flows associated with EU enlargement, and to analyze the extent to which these flows
affected equilibrium wages. The main conclusion is that the real wage effects are relatively
small, and the gains from open borders are very large.
Measuring Gains from International Migration
Paper Session
Friday, Jan. 4, 2019 8:00 AM - 10:00 AM
- Chair: Michael A. Clemens, Center for Global Development
Border Walls
Abstract
During 2007-2010 the US government built border fences along one-third of theUS-Mexico border. We apply a number of new datasets to study the effect of this fence
construction on migration and the labor market in both the U.S. and Mexico. We document that the construction of a fence: (i) reduced migration between aected
origin-destination pairs by 4%, (ii) reduced the stock of migrants in a US destination
region by 2% for every 100 origins aected by the fence, (iii) lead to an internal general
equilibrium response, with an inow of the stock of high-educated US-born workers
of 0.6% (0.1% for low-educated US-born workers), and (iv) lead to a decrease in the
wages of low-educated US-born workers of 0.7% and high-educated US-born workers of
0.5%, with no statistically signicant change to the wage of migrant workers. We then
develop a quantitative general equilibrium spatial model incorporating multiple types
of labor and the costly movement of goods and people across space. We show that this
model can match the above facts and estimate the model using the construction of the
border fence. Finally, we use the model to predict the effect of a proposed border fence
that spans the entire border.
Open Borders in the European Union and Beyond: Migration Flows and Labor Market Implications
Abstract
In 2004, the European Union admitted 10 new countries, and wages in these countrieswere generally well below the levels in the existing member countries. Citizens of these newly admitted
countries were subsequently free to take jobs anywhere in the EU, and many did so. In
2015, a large number of refugees from Syria and other broken countries sought to migrate to EU
countries (along very dangerous routes), and these refugees were met with fierce resistance, at
least in some places. This paper seeks to understand the labor market implications of allowing
free migration across borders, with particular reference to the EU. The aim is to quantify the
migration flows associated with EU enlargement, and to analyze the extent to which these flows
affected equilibrium wages. The main conclusion is that the real wage effects are relatively
small, and the gains from open borders are very large.
The IT Boom And Other Unintended Consequences of Chasing the American Dream
Abstract
We study how US immigration policy coupled with the Internet boom affected not just the US economy, but also led to a tech boom in India. Indian students enrolled in engineering schools to gain employment in the rapidly growing US IT industry via the H-1B visa program. Those who could not join the US workforce, due to the H-1B cap, remained in India, enabling the growth of an Indian IT sector. Those who returned with acquired human capital and technology after the expiration of their H-1Bs also contributed to the growing tech-workforce in India. The increase in IT productivity allowed India to eventually surpass the US in software exports. Our general equilibrium model captures firm-hiring across various occupations, innovation and technology diffusion, and dynamic worker decisions to choose occupations and fields of major in both the US and India. We identify key elasticities using an instrumental variables strategy, and show that our model captures levels and trends of key variables in validation tests. We perform counterfactual exercises and find that on average, workers in each country are better off because of high-skill migration. The H-1B program induced Indians to switch to computer science (CS) occupations, increasing the CS workforce in India and raising overall IT output. It also induced US workers to switch to non-CS occupations, reducing the US native CS workforce.Discussant(s)
William Kerr
,
Harvard Business School
Elisa Giannone
,
Pennsylvania State University
Na'ama Shenhav
,
Dartmouth College
JEL Classifications
- F2 - International Factor Movements and International Business
- O1 - Economic Development