Closing Heaven's Door: Evidence from the 1920s U.S. Immigration Quota Acts

51 Pages Posted: 26 Oct 2017

See all articles by Philipp Ager

Philipp Ager

University of Southern Denmark - Department of Business and Economics; Centre for Economic Policy Research (CEPR)

Casper Worm Hansen

University of Copenhagen - Department of Economics; University of Copenhagen

Multiple version iconThere are 2 versions of this paper

Date Written: October 26, 2017

Abstract

The introduction of immigration quotas in the 1920s fundamentally changed U.S. immigration policy. We exploit this policy change to estimate the economic consequences of immigration restrictions for the U.S. economy. The implementation of the quota system led to a long-lasting relative decline in population growth in areas with larger pre-existing immigrant communities of affected nationalities. This effect was largely driven by the policy-restricted supply of immigrants from quota-affected nationalities and lower fertility of first- and second-generation immigrant women. In the more affected areas labor productivity growth in manufacturing declined substantially and native workers were pushed into lower-wage occupations. While native white workers faced sizable earnings losses, black workers benefited from the quota system and improved their relative economic status within the more affected areas.

Keywords: Immigration Restrictions, Productivity Growth, Local Labor Markets, Racial Wage Gap

JEL Classification: J31, J61, N31, O15

Suggested Citation

Ager, Philipp and Hansen, Casper Worm, Closing Heaven's Door: Evidence from the 1920s U.S. Immigration Quota Acts (October 26, 2017). Available at SSRN: https://ssrn.com/abstract=3059439 or http://dx.doi.org/10.2139/ssrn.3059439

Philipp Ager (Contact Author)

University of Southern Denmark - Department of Business and Economics ( email )

DK-5230 Odense
Denmark

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Casper Worm Hansen

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Copenhagen K, DK 1153
Denmark

University of Copenhagen ( email )

Nørregade 10
Copenhagen, København DK-1165
Denmark

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