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The economic effect of immigration policies: analyzing and simulating the U.S. case

Andri Chassamboulli () and Giovanni Peri ()

Journal of Economic Dynamics and Control, 2020, vol. 114, issue C

Abstract: 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 comparing long-run steady states, 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.

Keywords: Immigration; Networks; Job creation; Unemployment; Wages (search for similar items in EconPapers)
JEL-codes: F22 J61 J64 (search for similar items in EconPapers)
Date: 2020
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Related works:
Working Paper: The Economic Effect of Immigration Policies: Analyzing and Simulating the U.S. Case (2019) Downloads
Working Paper: The Economic Effect of Immigration Policies: Analyzing and Simulating the U.S. Case (2018) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:114:y:2020:i:c:s016518892030066x

DOI: 10.1016/j.jedc.2020.103898

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Journal of Economic Dynamics and Control is currently edited by J. Bullard, C. Chiarella, H. Dawid, C. H. Hommes, P. Klein and C. Otrok

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