The Economic Effect of Immigration Policies: Analyzing and Simulating the U.S. Case

83 Pages Posted: 24 Sep 2018

See all articles by Andri Chassamboulli

Andri Chassamboulli

University of Cyprus

Giovanni Peri

University of California, Davis - Department of Economics

Date Written: September 2018

Abstract

In this paper we analyze the economic effects of different immigration policies using a model that incorporates economic and policy features crucial to understanding the migrant flows into the US. We differentiate among the most relevant channels of immigration to the US: family-based, employment-based and undocumented. Moreover we explicitly account for earning incentives to migrate and for the role of immigrant networks in generating immigration opportunities. Hence, we can analyze the effect of policy changes through those channels. In our simulations highly skilled employment and unskilled immigrants generate larger surplus to US firms than natives do. Hence policies restricting their entry either directly or indirectly have a depressing effect on job creation and, in turn, on native labor markets. Our analysis gives new insights into the effect of policies as it accounts for the endogenous immigration response which is overlooked by most existing models.

Suggested Citation

Chassamboulli, Andri and Peri, Giovanni, The Economic Effect of Immigration Policies: Analyzing and Simulating the U.S. Case (September 2018). NBER Working Paper No. w25074, Available at SSRN: https://ssrn.com/abstract=3254049

Andri Chassamboulli (Contact Author)

University of Cyprus ( email )

75 Kallipoleos Street
Nicosia CY 1678, Nicosia P.O. Box 2
Cyprus

Giovanni Peri

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-3033 (Phone)
530-752-9382 (Fax)

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