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

61 Pages Posted: 28 Jan 2020

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) - Department of Economics; University of California, Los Angeles (UCLA) - California Center for Population Research

Casper Worm Hansen

University of Copenhagen; University of Copenhagen - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: December 9, 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.

JEL Classification: J6, J61, N21

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 9, 2019). Available at SSRN: https://ssrn.com/abstract=3513619 or http://dx.doi.org/10.2139/ssrn.3513619

Ran Abramitzky

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 (Contact Author)

Princeton University ( email )

22 Chambers Street
Princeton, NJ 08544-0708
United States

Elior Cohen

University of California, Los Angeles (UCLA) - Department of Economics ( email )

8283 Bunche Hall
Los Angeles, CA 90095-1477
United States

University of California, Los Angeles (UCLA) - California Center for Population Research ( email )

337 Charles E Young Dr E
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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