The Effects of Immigration on the Economy: Lessons from the 1920s Border Closure

61 Pages Posted: 9 Dec 2019 Last revised: 4 Jul 2024

See all articles by Ran Abramitzky

Ran Abramitzky

Stanford University

Philipp Ager

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

Leah Platt Boustan

Princeton University

Elior Cohen

University of California, Los Angeles (UCLA)

Casper Worm Hansen

University of Copenhagen - Department of Economics; University of Copenhagen

Multiple version iconThere are 3 versions of this paper

Date Written: December 2019

Abstract

In the 1920s, the United States substantially reduced immigrant entry by imposing country-specific quotas. We compare local labor markets with more or less exposure to the national quotas due to differences in initial immigrant settlement. A puzzle emerges: the earnings of existing US-born workers declined after the border closure, despite the loss of immigrant labor supply. We find that more skilled US-born workers – along with unrestricted immigrants from Mexico and Canada – moved into affected urban areas, completely replacing European immigrants. By contrast, the loss of immigrant workers encouraged farmers to shift toward capital-intensive agriculture and discouraged entry from unrestricted workers.

Suggested Citation

Abramitzky, Ran and Ager, Philipp and Boustan, Leah Platt and Cohen, Elior and Hansen, Casper Worm and Hansen, Casper Worm, The Effects of Immigration on the Economy: Lessons from the 1920s Border Closure (December 2019). NBER Working Paper No. w26536, Available at SSRN: https://ssrn.com/abstract=3500654

Ran Abramitzky (Contact Author)

Stanford University ( email )

Stanford, CA 94305
United States

Philipp Ager

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

DK-5230 Odense
Denmark

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Leah Platt Boustan

Princeton University ( email )

22 Chambers Street
Princeton, NJ 08544-0708
United States

Elior Cohen

University of California, Los Angeles (UCLA) ( email )

405 Hilgard Avenue
Box 951361
Los Angeles, CA 90095
United States

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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