Implications of U.S. Immigration policies for North American economies

Stephen Devadoss, Xin Zhao, Jeff Luckstead

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

We develop a four-sector (labor-intensive agriculture, capital-intensive agriculture, service & construction, and manufacturing) general-equilibrium model of North American countries to analyze the effects of tighter U.S. immigration policies. Results show that these policies Erode the comparative advantage of U.S. labor-intensive agriculture, causing U.S. production and exports to fall and other countries to expand their exports to the United States. In Mexico, low-skilled labor demand in labor-intensive agriculture increases as production rises. The effectiveness of U.S. tighter immigration policies depends on the substitutability between U.S. domestic and undocumented workers. Immigration policies exacerbate the wedge between Mexican low-skilled wage rate and the undocumented wage rate, intensifying the underlying cause for unauthorized entry.

Original languageEnglish
Pages (from-to)161-178
Number of pages18
JournalJournal of Agricultural and Resource Economics
Volume45
Issue number1
DOIs
StatePublished - 2020

Keywords

  • Labor flow
  • Labor-intensive sectors
  • Trade

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