Immigration Restrictions as Active Labor Market Policy: Evidence from the Mexican Bracero Exclusion

Abstract

There has been little rigorous evaluation of immigration barriers intended to improve domestic terms of employment by shrinking the workforce. We study one such barrier, a policy change that excluded almost half a million Mexican bracero seasonal agricultural workers from the United States. Using novel data to measure state-level exposure to the policy, we reject the wage effect of bracero exclusion predicted by theory in the absence of induced technical change. We fail to reject the hypothesis that exclusion did not affect U.S. agricultural wages or employment. Important mechanisms include adoption of less labor-intensive technologies and shifts in crop mix.