Are shocks to human capital composition permanent? Evidence from the Mariel boatlift

Abstract

We examine whether shocks to a city's average level of human capital are associated with persistent or permanent changes in human capital. The Mariel boatlift of 1980 represents an exogenous negative shock to Miami's average human capital because it attracted a particularly low-skilled mix of immigrants. To assess whether the boatlift affected Miami's future human capital accumulation, we construct a synthetic control group to analyze the effect of this shock. The results suggest that the Miami metropolitan area experienced slower increases in average human capital than its synthetic control city after the boatlift. This result is robust to alternative estimation strategies, data sets, and alternative hypotheses. The result implies that a decreased level of average skills tends to subsequently attract unskilled skilled workers more strongly than skilled workers, at least in the context of immigration shocks. We discuss plausible mechanisms for this finding and place the findings into the context of the spatial equilibrium model.

Lessons from the 2020 Covid recession for understanding regional resilience

“…Also, at least initially, Covid spread faster in larger cities, so there is a reason to expect differential economic impacts of the pandemic related to population size. We include educational‐attainment measures due to the role human capital plays in attracting fast‐growing, skill‐intensive industries (Glaeser & Saiz, 2003) and its positive impact on future regional human capital levels (Chung & Partridge, 2019; Chung et al, 2020). Hence, we expect that educational attainment will be positively related to local resilience.…”

Does refugee inflow affect urban crime? Evidence from the U.S. Indochinese refugee resettlement

“…In explaining those findings, Lewis (2004) suggests that Miami responded to the in-migration by more slowly adopting computer-based technology than other cities, and therefore was able to mitigate the effects of the increase in low-skilled labor. In a similar vein, Chung and Partridge (2019) find that low-skill-intensive industries expanded in Miami in years following the Mariel Boatlift.…”

“…Further, there is no strong evidence that immigration intensifies competition in the labor market among unskilled laborers (Card, 1990;Peri & Yasenov, 2017), possibly due to immigrants' preference to work for businesses owned by co-ethnics and also as some immigrants enter the high-skilled labor market instead. In the longer term, local industry compositions may also change to accommodate immigrant labor (Chung & Partridge, 2019;Lewis, 2004). Schnapp (2015) argues that much of the immigration-crime literature does not recover the causal effect of immigration due to imperfectly addressed selection.…”