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Estimating Immigration’s Impact: Accounting for All Adjustments

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The Economics of Immigration

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Abstract

This chapter surveys the evidence of the long-run effects of immigration on the destination economy. We specifically discuss the most recent literature on how immigration affects domestic migration by native workers, the demand for domestic production and, hence, domestic labor, the industrial mix, and producers’ choice of technology. Particular attention is paid to evidence regarding the effects of immigration on local product demand. When product demand effects are accounted for, the evidence shows that broader long-term reactions to immigration are likely to be nonnegative. However, evidence on other potential long-run adjustment responses is more complex.

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Notes

  1. 1.

    Cortes (2008) addresses another more specific question, which is the following: How does immigration affect the product supply curve? She uses US data for 1980–2000 to measure local immigrant densities and low-skilled labor shares, as well as store-level price data and constructs estimates of local price indices for nontradeable low-skilled services. Cortes finds that an increase of 10 % in the share of low-skilled labor in a city decreases the price of these services by approximately 2.5 %. However, her estimate does not take into account any effects of immigration on service demand.

  2. 2.

    See also Vedder, Gallaway, and Moore (2000, pp. 347–364).

  3. 3.

    Kirchner and Baldwin (1992).

  4. 4.

    The words of Rep. Bill Archer of Texas, chairman of the House Ways and Means Committee, in describing earlier immigrants and justifying his committee’s 1995 bill to deny welfare payments to most legal immigrants.

  5. 5.

    Rose, F. (1995, April 26). Muddled masses, the growing backlash against immigrants includes many myths. Wall Street Journal.

  6. 6.

    Other economic historians who reach similar conclusions about nineteenth-century US immigration and economic growth are Irwin (2000), Hill (1971), and Crafts and Venables (2001).

  7. 7.

    For example, Borjas (1995) presents exactly the model we present in Fig. 3.5 but offers no clues as to the likelihood or magnitude of areas a and c.

  8. 8.

    As quoted in Pascal (1998).

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Authors and Affiliations

  1. Department Economics, St. Cloud State University, St. Cloud, MN, USA

    Örn B. Bodvarsson

  2. Department Economics, University of Nebraska, Lincoln, NE, USA

    Hendrik Van den Berg

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  1. Örn B. Bodvarsson
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Bodvarsson, Ö.B., Van den Berg, H. (2013). Estimating Immigration’s Impact: Accounting for All Adjustments. In: The Economics of Immigration. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-2116-0_7

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