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

71 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 changing immigration policies in a realistic institutional set-up, using a search model calibrated to the migrant flows between the US and the rest of the world. We explicitly differentiate among the most relevant channels of entry of immigrants 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 job-related and family-related immigration opportunities. Hence, we can analyze the effect of policy changes in each channel, accounting for the response of immigrants in general equilibrium. We find that all types of immigrants generate higher surplus for US firms relative to natives, hence restricting their entry has a depressing effect on job creation and, in turn, on native labor markets. We also show that substituting a family-based entry with an employment-based entry system, and maintaining the total inflow of immigrants unchanged, job creation and natives' income increase.

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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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