The Grecian Horse II: Do Immigrants Import Their Home Country’s Institutions Into Their Host Countries? The Case of the American States
75 Pages Posted: 7 Feb 2019 Last revised: 7 Jun 2019
Date Written: January 15, 2019
In recent years, in response to an increasing literature pointing to the economic deadweight loss associated with immigration restrictions, a literature has emerged pointing to the negative economic repercussions on economic growth would increasing immigration from countries with poor institutions have on the quality of the host country's institutions when these immigrants import their institutions into their host countries. Since then economists have attempted to test whether immigrants have a negative impact on their host country’s institutions. This paper builds on Padilla and Cachanosky (2018) and examines how immigrants grouped according the Economic Freedom of the World quartile their country of origin was ranked at time of the census may impact the economic institutions of the states as measured by Economic Freedom of North America index. Our results show that, in the short run, we do observe that the relationship between migrants originating from countries with poor economic institutions and economic freedom is negative, but, in the longer run, that relationship becomes positive, particularly, in the area of labor market freedom. On the other hand, in the longer run, the relationship between migrants coming from most economically free countries and economic freedom is negative. Our results are robust to various specifications.
Keywords: Economic freedom, Immigration, Institutions, State government
JEL Classification: F22, H70, O43
Suggested Citation: Suggested Citation