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Should the U.S. Have Locked the Heaven's Door? Reassessing the Benefits of the Postwar Immigration

Xavier Chojnicki (), Frédéric Docquier () and Lionel Ragot

No 1676, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper examines the economic impact of the second great immigration wave (1945-2000) on the US economy. Contrary to recent studies, we estimate that immigration induced important net gains and small redistributive effects among natives. Our analysis relies on a computable general equilibrium model combining the major interactions between immigrants and natives (labor market impact, fiscal impact, capital deepening, endogenous education, endogenous inequality). We use a backsolving method to calibrate the model on historical data and then consider two counterfactual variants: a cutoff of all immigration flows since 1950 and a stronger selection policy. According to our simulations, the postwar US immigration is beneficial for all cohorts and all skill groups. These gains are closely related to a long-run fiscal gain and a small labor market impact of immigrants. Finally, we also demonstrate that all generations would have benefited from a stronger selection of immigrants.

Keywords: computable general equilibrium; welfare; inequality; immigration (search for similar items in EconPapers)
JEL-codes: J61 I3 D58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp and nep-his
Date: 2005-07
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Published in: Journal of Population Economics, 2011, 24 (1), 317-359

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