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

Philipp Ager, Ran Abramitzky, Leah Boustan, Elior 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; Local labor markets; Labor mobility (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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Citations: View citations in EconPapers (32)

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Working Paper: The Effects of Immigration on the Economy: Lessons from the 1920s Border Closure (2019)
Working Paper: The Effects of Immigration on the Economy: Lessons from the 1920s Border Closure (2019)
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