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1. The Labor Market Effects of Refugee Waves: Reconciling Conflicting Results

Author:
Michael Clemens and Jennifer Hunt
Publication Date:
05-2017
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
An influential strand of research has tested for the effects of immigration on natives’ wages and employment using exogenous refugee supply shocks as natural experiments. Several studies have reached conflicting conclusions about the effects of noted refugee waves such as the Mariel Boatlift in Miami and post-Soviet refugees to Israel. We show that conflicting findings on the effects of the Mariel Boatlift can be explained by a sudden change in the race composition of the Current Population Survey extracts in 1980, specific to Miami but unrelated to the Boatlift. We also show that conflicting findings on the labor market effects of other important refugee waves can be produced by spurious correlation between the instrument and the endogenous variable introduced by applying a common divisor to both. As a whole, the evidence from refugee waves reinforces the existing consensus that the impact of immigration on average native-born workers is small, and fails to substantiate claims of large detrimental impacts on workers with less than high school.
Topic:
Refugee Issues, Financial Markets, and Global Political Economy
Political Geography:
Global Focus

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

Author:
Michael Clemens, Ethan Lewis, and Hannah Postel
Publication Date:
03-2017
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
An important class of active labor market policy has received little rigorous impact evaluation: immigration barriers intended to improve the terms of employment for domestic workers by deliberately shrinking the workforce. Recent advances in the theory of endogenous technical change suggest that such policies could have limited or even perverse labor market effects, but empirical tests are scarce. We study a natural experiment that excluded almost half a million Mexican ‘bracero’ seasonal agricultural workers from the United States, with the stated goal of raising wages and employment for domestic farm workers. We build a simple model to clarify how the labor market effects of bracero exclusion depend on assumptions about production technology, and test it by collecting novel archival data on the bracero program that allow us to measure state-level exposure to exclusion for the first time. We reject the wage effect of bracero exclusion required by the model in the absence of induced technical change, and fail to reject the hypothesis that exclusion had no eect on US agricultural wages or employment. Important mechanisms for this result include both adoption of less labor-intensive technologies and shifts in crop mix.
Topic:
Labor Issues, Immigration, and Financial Markets
Political Geography:
Mexico