, Volume 24, Issue 1, pp 317-359

Should the US have locked heaven’s door?

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Abstract

This paper examines the economic impact of the second great immigration wave (1945–2000) on the US economy. 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). Contrary to recent studies, we show that immigration induced important net gains and small redistributive effects among natives. According to our simulations, the postwar US immigration is beneficial for all natives cohorts and all skill groups. Nevertheless, the gains would have been larger if the US had conducted a more selective immigration policy.

Responsible editor: Alessandro Cigno