Do Interest Groups Affect Immigration?

Abstract

While anecdotal evidence suggests that interest groups play a key role in shaping immigration, there is no systematic empirical evidence on this issue. To motivate our analysis, we develop a simple theoretical model where migration policy is the result of the interaction between organized groups with conflicting interests towards labor flows. We evaluate the key predictions of the model using a new, industry-level dataset from the United States that we construct by combining information on the total number of immigrants and H1B visas with data on lobbying expenditures associated with immigration. We find robust evidence that both pro- and anti-immigration interest groups play a statistically significant and economically relevant role in shaping migration across sectors. Barriers to migration are lower in sectors in which business lobbies incur larger lobbying expenditures and higher in sectors where labor unions are more important.

Keywords: immigration, immigration policy, interest groups, political economy

JEL Classification: F22, J61