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Closing Heaven's Door: Evidence from the 1920s U.S. Immigration Quota Acts

Philipp Ager () and Casper Hansen ()

No 11/2017, Discussion Papers of Business and Economics from University of Southern Denmark, Department of Business and Economics

Abstract: The introduction of immigration quotas in the 1920s fundamentally changed U.S. immigration policy. We exploit this policy change to estimate the economic consequences of immigration restrictions for the U.S. economy. The implementation of the quota system led to a long-lasting relative decline in population growth in areas with larger pre-existing immigrant communities of affected nationalities. This effect was largely driven by the policy-restricted supply of immigrants from quota-affected nationalities and lower fertility of first- and second-generation immigrant women. In the more affected areas labor productivity growth in manufacturing declined substantially and native workers were pushed into lower-wage occupations. While native white workers faced sizable earnings losses, black workers benefited from the quota system and improved their relative economic status within the more affected areas.

Keywords: Immigration restrictions; productivity growth; local labor markets; racial wage gap (search for similar items in EconPapers)
JEL-codes: J31 J61 N31 O15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gro, nep-his, nep-lab and nep-mig
Date: 2017-10-26
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