The Effect of Immigration on Local Labor Markets: Lessons from the 1920s Border Closure

Abstract

In the 1920s, the United States substantially reduced immigration by imposing country-specific entry quotas. We compare local labor markets differentially exposed to the quotas due to variation in the national-origin mix of their immigrant population. US-born workers in areas losing immigrants did not gain in income score relative to workers in less exposed areas. Instead, in urban areas, European immigrants were replaced with internal migrants and immigrants from Mexico and Canada. By contrast, farmers shifted toward capital-intensive agriculture and the immigrant-intensive mining industry contracted. These differences highlight the uneven effects of the quota system at the local level.

The Long-Run Effects of Immigration: Evidence Across a Barrier to Refugee Settlement

“…Their results are consistent with agglomeration economies arising from increasing returns to scale and network externalities. 7 Finally, our study is also related to the literature on short-and medium-run effects of internal and international migration on local labor markets, see, for example, Boustan et al (2010), Peri (2016), and Abramitzky et al (2022).…”

Cousins from Overseas: The Labour Market Impact of a Major Forced Return Migration Shock

“…Our paper is also related to the literature on migration that exploits natural experiments driving exogenous increases in the supply of immigration (Card 1990;Hunt 1992;Friedberg 2001;Borjas 2017;Clemens and Hunt 2019;Peri and Yasenov 2019;Sarvimäki, Uusitalo, and Jäntti 2022), and negative supply shocks on origin countries following immigration restrictions (Clemens, Lewis, and Postel 2018;Abramitzky et al 2022;Testa 2021). 6 The remainder of this paper is organised as follows.…”

Cousins from Overseas: The Labour Market Impact of a Major Forced Return Migration Shock

“…Our paper is also related to the literature on migration that exploits natural experiments driving exogenous increases in the supply of immigration (Card 1990;Hunt 1992;Friedberg 2001;Borjas 2017;Clemens and Hunt 2019;Peri and Yasenov 2019;Sarvimäki, Uusitalo, and Jäntti 2022), and negative supply shocks on origin countries following immigration restrictions (Clemens, Lewis, and Postel 2018;Abramitzky et al 2022;Testa 2021). 6 The remainder of this paper is organised as follows.…”