Closing the Border: The Impact of U.S. Migration and Trade Policy

Cruz, José-Luis and Julian Di Giovanni

No 20949, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper quantifies the impact of recent U.S. migration policy on the aggregate economy and state-level outcomes using a general equilibrium trade model with heterogeneous firms and imperfect substitution between natives and immigrants. The analysis incorporates data on migration by legal status, skill composition, trade flows, and firm heterogeneity. Repatriating undocumented immigrants reduces U.S. GDP by 5.46% and natives’ welfare by 2.46%, while repatriating temporary visa holders results in declines of 1.50% and 0.66%, respectively. Regional effects vary, reflecting differences in states’ immigrant-to-population shares. Model-implied welfare losses from repatriating undocumented immigrants are almost twice that of recent tariff increases.

Keywords: Immigration (search for similar items in EconPapers)
JEL-codes: F12 F15 F22 F24 (search for similar items in EconPapers)
Date: 2025-12
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