The Grecian horse: does immigration lead to the deterioration of American institutions?
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Concerns about the institutional impact of immigration, particularly in the United States, are not new. We can trace them back to Benjamin Franklin, Thomas Jefferson, and Alexander Hamilton. More recently, in response to a literature that questions the desirability of current immigration restrictions, Borjas (J Econ Lit 53:961–974, 2015) speculates that immigrants coming from countries with poor institutions could reduce substantially the institutional quality in the United States to a point where it could negate all economic gains associated with immigration in terms of GDP and income. Using the Economic Freedom of North America index since 1980, we find no evidence to corroborate Borjas’s concerns. However, we find mixed evidence that immigration increases minimum wages and union density.
KeywordsEconomic freedom Immigration Institutions State government
JEL ClassificationF22 H70 O43
We thank the participants from the Free Market Institute at Texas Tech University research workshop for their comments. We owe a great deal of gratitude to Andrew T. Young, Jamie Bologna, and Audrey Redford for their comments and assistance in helping us improve on previous drafts of this paper. We also thank the anonymous referees, whose comments and suggestions have helped us to improve our article. The usual caveats apply. Padilla gratefully acknowledges financial support from the John Templeton Foundation.
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