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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. Studies on how immigration affects product demand conclude that the broader long-term reactions to immigration imply that immigration is likely to have positive welfare effects and certainly no strong negative effects. 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: How does immigration affect the product supply curve? She uses U.S. data for 1980–2000 to measure local immigrant densities and low-skilled labor shares, as well as store-level price data to construct estimates of local price indices for non-tradeable low-skilled services. Cortes finds that an increase of 10 percent 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.

    Kirchner and Baldwin (1992).

  3. 3.

    See Zawodny (1997), referenced earlier, and Vedder, Gallaway, and Moore (2000).

  4. 4.

    Kirchner and Baldwin (1994).

  5. 5.

    Zeretsky (1997, p. 5).

  6. 6.

    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.

  7. 7.

    Rose (1995).

  8. 8.

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

  9. 9.

    For example, Borjas (1995) presents exactly the model we present in Figs.3–5, but offers no clues as to the likelihood or magnitude of areas a and c.

  10. 10.

    As quoted in Pascal (1998).

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Authors and Affiliations

  1. Department of Economics, St. Cloud State University, 720 Fourth Avenue South, St. Cloud, MN, 56301, USA

    Örn B. Bodvarsson

  2. Department of Economics, University of Nebraska, 880489, Lincoln, NE, 68588-0489, USA

    Hendrik Van den Berg

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  1. Örn B. Bodvarsson
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  2. Hendrik Van den Berg
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Correspondence to Örn B. Bodvarsson .

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Bodvarsson, Ö.B., Van den Berg, H. (2009). Estimating Immigration’s Impact: Accounting for all Adjustments. In: The Economics of Immigration. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-77796-0_7

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  • DOI: https://doi.org/10.1007/978-3-540-77796-0_7

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