Should the U.S. Have Locked the Heaven's Door? Reassessing the Benefits of the Postwar Immigration

33 Pages Posted: 28 Jul 2005

See all articles by Xavier Chojnicki

Xavier Chojnicki

University of Lille

Frédéric Docquier

Université catholique de Louvain; CREAM, Centre for Research on Environmental Appraisal & Management, UK; IZA Institute of Labor Economics

Lionel Ragot

University of Lille I

Date Written: July 2005

Abstract

This paper examines the economic impact of the second great immigration wave (1945-2000) on the US economy. Contrary to recent studies, we estimate that immigration induced important net gains and small redistributive effects among natives. Our analysis relies on a computable general equilibrium model combining the major interactions between immigrants and natives (labor market impact, fiscal impact, capital deepening, endogenous education, endogenous inequality). We use a backsolving method to calibrate the model on historical data and then consider two counterfactual variants: a cutoff of all immigration flows since 1950 and a stronger selection policy. According to our simulations, the postwar US immigration is beneficial for all cohorts and all skill groups. These gains are closely related to a long-run fiscal gain and a small labor market impact of immigrants. Finally, we also demonstrate that all generations would have benefited from a stronger selection of immigrants.

Keywords: immigration, inequality, welfare, computable general equilibrium

JEL Classification: J61, I3, D58

Suggested Citation

Chojnicki, Xavier and Docquier, Frédéric and Ragot, Lionel, Should the U.S. Have Locked the Heaven's Door? Reassessing the Benefits of the Postwar Immigration (July 2005). IZA Discussion Paper No. 1676. Available at SSRN: https://ssrn.com/abstract=769704

Xavier Chojnicki

University of Lille ( email )

Lille
France

HOME PAGE: http://https://sites.google.com/site/xchojnicki/

Frédéric Docquier (Contact Author)

Université catholique de Louvain ( email )

IRES
Place Montesquieu 3
Louvain-la-Neuve, 1348
Belgium

HOME PAGE: http://https://perso.uclouvain.be/frederic.docquier/

CREAM, Centre for Research on Environmental Appraisal & Management, UK

University of Newcastle
NE1 7RU Newcastle Upon Tyne
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Lionel Ragot

University of Lille I ( email )

104, avenue du peuple Belge
Villeneuve d'Ascq Cedex, 59655
France

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