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

Ran Abramitzky, Philipp Ager (), Leah Boustan (), Elior David Cohen and Casper Hansen ()

No 14165, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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 decline 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 - move into affected urban areas, completely replacing European immigrants. By contrast, the loss of immigrant workers encouraged farmers to shift toward capital-intensive agriculture and discourage entry from unrestricted workers.

Keywords: Immigration Restrictions; labor mobility; Local Labor Markets (search for similar items in EconPapers)
JEL-codes: J61 J70 N32 (search for similar items in EconPapers)
Date: 2019-12
New Economics Papers: this item is included in nep-dem, nep-his, nep-int and nep-ure
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